Forensic Accounting Research of Mr. Gian Carlo N. Catahum

Running head: PERCEPTION ON FORENSIC ACCOUNTING 1
Awareness, Perception and Usage of Forensic Accounting among CPA Accounting
Educators at Holy Angel University
Gian Carlo N. Catahum
Holy Angel University Graduate School of Business
January 19, 2016

PERCEPTION ON FORENSIC ACCOUNTING 2
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Awareness, Perception and Usage of Forensic Accounting among CPA Accounting
Educators at Holy Angel University
Gian Carlo N. Catahum
Abstract
The main purpose of this study is to examine the level of awareness, perception,
and usage of forensic accounting among accounting educators at Holy Angel
University. A questionnaire survey was used to collect data from a total of 30
accountants. Research method is descriptive based on which the author has used
Likret 4 options-questionnaire to satisfy research objectives. The Pearson
coefficient of correlation is used to determine the relationships of variables. The
research results indicate a high level of awareness of forensic accounting among
the accountants which is correlated with their level of perceived effectiveness of
forensic accounting mechanisms to detect and prevent fraudulent activities. The
perception of the respondents is significantly related to the intent to use and actual
usage of forensic accounting. Recommendations to enhance the accountants
awareness perception and ultimately usage of forensic accounting are presented.
Keywords: Fraud prevention and detection, awareness, perception

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Accounting as a social science plays significant roles in society. It serves not
only as a legitimating device for the market economic system, but also as a form of
social language and certainly a business language, through which meanings and
implications are constructed by social actors in a society. However, accounting figures
are heavily exposed to fraud due to their influence on numerous crucial decisions that
affect various key social actors with far reaching implications. Corporate crises and
failures early in the twenty first century (e.g. Enron and WorldCom in the USA and HIH
Insurance, Ansett and Pan Pharmaceuticals in Australia) have undermined investors'
confidence in financial reporting and raised serious concerns over the effectiveness of
financial reporting, accounting standards and accountability.
These concerns made forensic accounting an attractive career opportunity in
recent years and increased the demand for forensic accounting practices as a means to
prevent, detect and respond to harm caused by fraud. They are tasked, among other
things, to put together the financial puzzle after the fallout of such scandals. They
rebuild entire financial systems, uncover financial statement fraud, trace funds, discover
hidden assets, and more. Carnes and Gierlasinki (2001) noted that inevitably,
accountants are being held to higher standards in their ability to understand and find
fraudulent activities within organizations.
Whereas the problem of fraud is a global one, the rate and extent to which it is
perpetrated, particularly in the public sector, is quite high and alarming Morteza
Ramazani and Hossein Refiie Atani (2010), examined accountants perception of
forensic accounting and the results demonstrated the low extent of accountant's
perception of forensic accounting.

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Cognizant of the situation, Efiong (2013) sought to attain the following: (1)
investigation of the mechanisms of fraud prevention and detection, and their levels of
effectiveness, (2) identifying the major factors that hinder the application of forensic
accounting techniques in fraud prevention and detection, (3) examining practitioners
opinions and behavioral intention to use forensic accounting techniques in fraud
prevention and investigation, (4) exploring the level of awareness of forensic
accounting techniques and (5) examining the readiness of universities in taking up
forensic accounting courses.
It was further discovered that the most effective mechanisms, like the forensic
accounting techniques, are the least used in fraud prevention and detection. This was
shown by Dr. Biswas, Kiram Hieremath, and Shalini R. (2013) who claimed that due to
the complex and traditional judicial system, political compulsion etc., forensic
accountants are facing great challenge in employing their services. This implies that the
current mechanisms of fraud prevention and detection are not proactive in dealing with
the fraud menace.
Nature of Forensic Accounting
(Chopra, 2009), describes Forensic accounting is a special domain of
accountancy that incorporates accounting principles and investigation techniques to
search out fraud and theft. To put it in simple words, forensic accounting involves
investigating crimes within the field of finance.
The word forensic is a derivative of the Latin word forensis, meaning belonging
to the forum, which was ancient Romes site for public discussion and debate. Forensic
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means relating to the use of science or technology in the investigation and
establishment of facts or evidence in a court. (Wikepedia, n.d.).
(Shieds, 2009) reveals that Forensic Accounting history dates as far back as
3300-3500 BC. The scribes of ancient Egypt, who were the accountants of their day,
were involved in the prevention and detection of fraud. In 1817, the principles of
Forensic Accounting were put into practice in court, when an accountant was needed to
testify at a bankruptcy hearing.
Modern forensic accounting focuses on 3 main areas: litigation support, forensic
accounting investigation, and dispute resolution.
Litigation support. Legal litigation support represents the descriptive
presentation of financial issues related to existing or pending legal proceeding. The
forensic accounting professional determines damages sustained by parties involved in
legal disputes and can assist in resolving disputes, even before they reach the courtroom.
If a dispute reaches the courtroom, the forensic accountant may testify as an expert
witness. (Forensic Accounting Demystified, n.d.)
Forensic accounting investigation and dispute resolution. Forensic accounting
investigation is the process of deciding whether criminal matters such as internal
employee theft, securities fraud (including falsification of financial statements), identity
theft, and insurance fraud have occurred. Some of the work of the forensic accountant
may include recommending actions that can be taken to minimize future damages and
risk of loss. (Forensic Accounting Demystified, n.d.)

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Definition of Accounting Fraud
Fraud is a legal term that refers to the intentional misrepresentation of the truth in
order to manipulate or deceive a company or individual. Accounting fraud is an act of
knowingly falsifying accounting records, such as sales or cost records, in order to boost
the net income or sales figures. Accounting fraud is illegal and subjects the company
and the executives involved to civil lawsuits. (Koh, Arokisamy, Lee Ah Suat, 2009).
David (2005) argues that fraud is not a possibility but a probability. Albrecht,
(2005) argues that fraud is rarely seen. However, the symptoms of fraud are usually
observed.
Ramaswamy (2005) states that poor corporate governance and accounting failure
is one of the reasons why fraud cases emerge. This is because poor corporate governance
will lead to the ability of certain individual or a group of people with the same interest to
act upon it to commit fraudulent activities in the company.
Fraud occurs at all levels of organizations. From underlings to owners, there are
many ways an employee can misuse and abuse the system.
Fraudulent Activities
The types of fraudulent activity which plague most businesses are:
Asset misappropriation. Pertains largely to different types of theft within an
organization, including:
Check forgery. Essentially, an employee takes checks and signs them in a name
that is now their own in order to cash them and make off with the funds before the
victim of the fraud knows what happened.

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Theft of money. From stealing from the companys petty cash box to raiding the
register after closing up shop, this is a common form of asset misappropriation.
Inventory theft - This can include stealing supplies, equipment or merchandise from an
organization.
Theft of services. Some of the most common everyday examples of this type of
theft can be illustrated by the classic dine-and-dash or turnstyle-jumping scenarios.
Essentially, someone takes advantage of a service without paying for it.
Bribery and corruption. This type of fraud is often associated with big
businesses, politics, and the blurry line that separates the two. Bribery involves paying
large sums of money to certain parties in order to influence decision-making, and
corruption can involve everything from kickbacks to shell company schemes.
Financial statement fraud. Often carried out at the upper-
management/executive levels, financial statement fraud is a deliberate misrepresentation
of data in order to give a false impression of the companys financial strength to
investors, shareholders, and any number of other audiences that might be put off or
scared away by the less-than-ideal financial health of an organization. The basic types of
this fraudulent activity are:
Embezzlement. It is also called larceny, which is the illegal use of funds by a
person who controls those funds
Internal theft. It is the stealing of company assets by employees.
Payoffs and kickbacks. These are situations in which employees accept cash or
other benefits in exchange for access to the companys business.

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Payoffs and kickbacks. These are situations in which employees accept cash or
other benefits in exchange for access to the companys business.
The Forensic Accountants and Auditors
The forensic accountants trace out fraud and criminal transactions from financial
records of the public and private organizations. They look for indisputable evidences.
External auditors find out the deliberate fraudulent statement only but the forensic
accountants find out the fraudulent statement deliberately.
Forensic accountants are hired to investigate, analyze, interpret, summarize, and
present complex financial information. Normally, accountants, especially CPAs, act like
watchdogs; a forensic accountant is trained to act more like an FBI Special Agent with a
CPA designation. Generally, they work for lawyers, police forces, insurance companies,
government regulatory bodies and agencies, banks, courts, and business community.
Their chief work is to testify civil and criminal court hearings by presenting evidences;
hence, they serve as expert witnesses. (Wikipedia, n.d.)
In the research conducted by Enofe, Okpako, Atube, (2013), they concluded that
the traditional auditing has limitation in detecting fraudulent practices which the forensic
accountants will effectively fill. They have the professional ability back up by law to
break into the organization system and examine the books, make discoveries and present
the documentary evidences in the law courts.
Forensic Accounting Methods
A forensic analysis is often performed in an attempt to reconstruct one or more
aspects of the historical financial results. It often employs methodologies similar to

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those used by auditors, such as reviewing bank statements and invoices, or performing
tests of
accounting records to investigate financial discrepancies. Kent, ( n.d.) lists and describes
some of these methods:
Direct and indirect methods. The Direct Method is also called the Transaction
Method. When using the Direct Method of forensic accounting, the accountant examines
cancelled checks and invoices, contracts, agreements and public records and notices.
The accountant may also interview management and employees.
Cash T method and source and application of funds method. The Cash T
Method compares cash received to the amount of cash spent. It is used to determine if a
company or individual had understated income. Similarly, the Source and Application of
Funds Method examines the amount spent on lifestyle versus assets and investments.
Net worth method. The Net Worth Method calculates total assets and subtracts
total liabilities of an individual or a company. The resulting number represents net
worth. Net worth is compared to reported income over several periods. When there are
unreconciled differences, a forensic accountant may pursue investigation of these
differences.
Bank deposit method. The Bank Deposit Method analyzes total deposits during
the year and compares it with total expenses. Transfers between accounts and checks
redeposited are subtracted from total deposits for the year to arrive at net deposits. Total
cash expenditures for the year are added to net deposits to arrive at total receipts for the
year. This number is compared to funds from known sources to determine the total funds
from unknown sources.

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Fraudulent Activities in the Philippines
Jurado (2010) claims that the Philippines suffers from widespread corruption.
Means of corruption include graft, bribery, embezzlement, backdoor deals, nepotism,
and patronage in a report by Australia and New Zealand Banking Group Limited,
commonly (ANZ).
Electronic fraud. These are Email scams and fake websites. A number of
Internet users have received emails claiming to be from financial institutions or other
legitimate organizations.
Job scams. Bogus overseas companies have been targeting unwitting victims to
act as money transfer agents in the sale of goods and services via methods such as job
advertisements, unsolicited emails and online chat rooms.
Identity theft. Identity theft is where a dishonest individual or syndicate will
gather your personal details in order to gain some sort of financial or other benefit,
often leaving the real owner of that identity with a large debt, a negative credit history,
and in some cases with legal implications.
Credit/debit card fraud. There are several ways that fraud can occur on your
credit card or debit card account.
Skimming is a technique where information stored on your cards magnetic
strip is stolen when your card is swiped during a transaction. Thieves are then able to
reproduce fake cards using your stolen details. Once completed, these cards can be used
to make purchases using your account. Credit or debit card fraud can also occur when
your card is lost or stolen and used by a third party to purchase goods or to withdraw
cash from the card. Cards can also be intercepted in transit while being sent to you.
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Cheque fraud. Cheque fraud is the use of a cheque to obtain financial
advantage by:
Altering the cheque (payee/amount) without appropriate authority
Theft of legitimate cheques and subsequent alteration or conversion
Duplication or counterfeiting of cheques
The use of false invoices to solicit legitimate cheques
Depositing a cheque into a third party account without authorityDepositing a
cheque for payment knowing that insufficient funds are in the account to
cover the deposited cheque.
Some Examples of Well-known Forensic Accounting Cases
Al Capones taxes. Al Capone was one of the most legendary gangsters of the
1920s and 1930s and he was able to avoid being caught by many of the best FBI agents
and detectives of the day. However, the famous gangster was finally brought down by an
accountant. In 1931, a forensic accountant named Frank Wilson brought down Al
Capone by uncovering his tax evasion. The IRS tracked all of the earnings that Capone
brought in from his illegal activities and then nailed him when he didnt report them for
tax purposes. (Crumbley, 2007).
Robert Maxwells embezzlement. Robert Maxwell, European publisher, had
been embezzling funds from shareholders, clients and more for years when he died in
1991. As soon as he passed away, his entire company started to crumble as it was mostly
built on deceit and lies and the games he had played with funding and loans. A team of
forensic accountants spent 14 years figuring out the entire mess and discovered that
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Maxwell had embezzled approximately $1 billion. Clarke, (1993) dubbed him as the
Master of Corporate Malfeasance.
PDAF scam. The Priority Development Assistance Fund scam, also called
the PDAF scam or the pork barrel scam, is a political scandal involving the alleged
misuse by several members of the Congress of the Philippines of their Priority
Development Assistance Fund (PDAF, popularly called "pork barrel"). Napoles has
been linked with an alleged misuse of the Priority Development Assistance Fund,
together with Philippine Senators Bong Revilla, Jinggoy Estrada,Juan Ponce Enrile, and
other congressmen. According to Carvajal, (2013)it is estimated that the Philippine
government was defrauded of some 10 billion in the course of the scam,[1] having been
diverted to Napoles, participating members of Congress and other government officials.
Plunder case against the Binays. In an article in the Philippine Inquirer on July
23, 2014, Jejomar Binay and his son Jun jun Binay over the alleged unconscionable
overpricing in the construction of an 11-story parking building that the city government
supposedly built for P1.56 billion.
Ethics in Forensic Accounting
All Certified Forensic Accountants must exemplify the highest moral and ethical
standards and must agree to abide by the bylaws of the and Code of Professional Ethics.
According to Huber, (2011), they are obliged to:
Inform appropriate parties of the results of work performed; revealing all
significant facts known to them.
Support the professional education of stakeholders in enhancing their
understanding of the forensic accounting and auditing, including: computer

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forensic, fraud examination, litigation support, due diligence and money laundering etc.
Support the professional education of stakeholders in enhancing their
understanding of the forensic accounting and auditing, including: computer forensic,
fraud examination, litigation support, due diligence and money laundering etc
Some of the findings of Huber (2011) showed that there are for-profit forensic
accounting corporations that do not disclose their legal status; a sinificant number of
forensic accountants do not know the legal status of the corporations that issued their
certifications and may incorrectly believe that the corportations that issued their
certifications are not-for-profit.
Huber (2011a) further argues that forensic accounting is emerging as a
profession separate and distinct from public accounting. If forensic accounting is a
profession then the necessity of having and complying with a strong, effective, and
enforceable code of ethics and standards of practice is inescapable. In addition, the
importance of forensic accounting corporations adopting a common code of ethics takes
on a more urgent appeal. However, the differences in the legal structures of forensic
accounting corporations have to this point hindered the development of a common code
of ethics and standards of practice.
Researches on Forensic Accounting
Perception of forensic Accounting. KPMGs Fraud Survey (2003) reveals that
more companies are recently experiencing incidents of fraud than in prior years; taking
measures to combat fraud; and launching new antifraud initiatives and programs.
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The study undertaken by Ramazani, Rafiei Atani, (2010) indicates the low level
of accountants perception of forensic accounting methods in which the author provide
some recommendations to enhance the accountants perception of forensic accounting.
Koh (2009) believed that forensic accounting activities such as investigative
accounting and litigation support will enrich the organizational performance. It is
encouraged that all businesses should put in place forensic accounting as a tool to
enhance transparency, credibility and accountability. In the term of forensic accounting,
these have led to better performance and encouraged individuals to commitment to the
organizational performance. Forensic accounting a important for all organization sizes
and not limited to for small firms.
Problems of forensic accounting. Biswas, Hiremath, Shalini, (2013) identify
some factors that hinder the acceptance of forensic accounting as a means to curtail
fraudulent activities.
In spite of the current economic downturn in most developing countries forensic
accounting in these economies is niche field. Many still perceive forensic accounting as
just an extension of investigative auditing. There not enough qualified accountants with
adequate technical know-how on forensic issues.
In India, for example, according to Biswas, et. Al. (2003), most of the corruption
cases that have been discovered showed that politicians and bureaucrats were involved.
They further noted that due to the complex and traditional judicial system and political
compulsion, forensic accountants are facing the challenged of gathering information
against such big shots that is admissible in the court of law. The admissibility, of
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evidence in compliance with the laws of evidence is crucial to successful prosecutions
of criminal and civil claims.
Biswas, et.al. (2003) added that it will be quite costly if the issues were brought
to court and where it involves expert witnessing. Thus, most companies prefer to settle
the issue outside the court to avoid the expensive cost and the risk of bad publicity on
their corporate image.
Forensic accounting education. PricewaterhouseCoopers (PWC) 2003 Global
Crime Survey indicates that 37 percent of respondents in 50 countries reported
significant economic crimes with the average loss per company of $2,199, 930 (PWC
2003). These survey results underscore the importance of forensic accounting practice
and education
Rezaee and Burton, (2000) review the literature on forensic accounting
practices, certifications, and education. These studies also provide evidence indicating
that forensic accounting education has evolved from being limited, to continuing
professional education sessions for practicing accountants, to a current state of being
offered as a credit course by several universities.
Buckhoff and Schraders study (2000, 135) finds, adding a forensic accounting
course to the accounting curriculum can greatly benefit the three major stakeholders in
accounting educationacademic institutions, students, and employers of accounting
graduates.
Efiong, Zadeh , and Ramazani (2012) observed that there is less number of
studies about forensic accounting conducted in developing countries such as in Nigeria,

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Turkey, Iran and Bahrain. In fact, only two studies were found that specifically
discussed the obstacles of
integrating forensic accounting into accounting curriculum in the universities (Razaee et.
al, 1992).
As regulators continue to increase the responsibility for auditors to detect
fraudulent financial statements, the demand for forensic accounting educations was
further highlighted in Carnes and Gierlansinki (2001). The authors examined the
mismatch between the supply of and demand for auditors with forensic accounting
skills. They noted that the universities have been slow in responding to this demand,
particularly in designing courses. Rezaee and Burton (1997) and Gierlasinki et al. (1998)
The reasons always given during surveys for this slow pace in change of accounting
curricular include: not having enough room in the curricular to include additional
training in fraud or forensic accounting, or /and, that the school must stick to the basics
of intermediate, cost and audit accounting.
Research has shown that a number of Universities, particularly in the US are
already offering forensic accounting courses while some are even introducing full
academic program in the area. Kleyman (2006) reviews some examples of these
institutions and the program they offer in forensic accounting. For example, he notes
that California State University, Northbridge has been teaching forensic accounting
course as part of its regular accounting program.
Other studies showed that Forensic accounting education in developing countries
like the Philippines has not received adequate coverage in accounting curriculum as
demanded by investors and the business community who are deeply concerned with
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reported financial and accounting scandals. In fact, only the University of the Cordilleras
in Baguio City offers Forensic Accounting as a course in the Philippines. Problems
arise from the fact that forensic accounting service is still new to most of the businesses
and even to the public. Some may even be unaware of the existence of the system and so
the importance of the service is ignored.
Through this study, the level of awareness in public service, private
organizations, and policy makers on forensic accounting, together with perceived
benefit, perceived risks, perceived susceptibility to and perceived severity of fraud, will
enhance their interest to use forensic accounting techniques in their organizations.
The review of studies clearly showed that there is a dearth of information
regarding the awareness and engagement of forensic accounting services needed to curb
the growing fraudulent activities in business. Cognizant of this reality the researcher
was motivated to conduct this study, although to a very limited scale, that examined the
extent of perception of Forensic Accounting as a means to detect and reduce accounting
fraud cases in Philippine companies. Generally, the study was designed to explore the
level of perception of certified public accountants who are practitioners as well as
faculty members at Holy Angel University as to awareness, benefits, and usage of
Forensic Accounting.
The Research Model
This research intended to examine the level of perception of certified public
accountants on forensic accounting which ultimately predict their planned behavior to
use it. The theoretical framework of this research was based on the Theory of Planned
Behavior.
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The Theory of Planned Behavior (abbreviated TPB) links beliefs and behavior.
The concept was proposed by Icek Ajzen (1991) to improve on the predictive power of
the theory of reasoned action by including perceived behavioral control. The theory of
planned behavior has frequently been applied to predict the likelihood that individuals
will engage in various pro-social behaviors. The theory states that attitude toward
behavior, subjective norms, and perceived behavioral control, together shape an
individuals behavioral intentions and behaviors. The constructs of the theory are:
An attitude. This is an individuals positive or negative feelings (evaluative
effect) about performing the target behavior (Fishbein and Ajzen , 2005) In this study
the effectiveness of the forensic accounting mechanisms and prevention constituted the
Attitude variables.
Subjective norms. These constitutes an individuals perception of whether the
behavior should be performed. The factors that hinder the use of forensic accounting
and the perceived benefits derived from forensic accounting were considered the
variables that constituted Subjective Norms.
Perceived behavioral control. It refers to a persons perceptions of their ability
to perform a given behavior. This construct was represented by the professional skills
and experiences of the research participants.
Intention. This is assumed to be the immediate antecedent of behavior.
However, because many behaviors pose difficulties of execution, it is useful to consider
perceived behavioral control. Items in the questionnaire regarding behavior towards

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forensic accounting were signified intentions rather than actual usage, except for number
1.
Behavior. This is the actual observable thing that you do. Obviously, item
number 1 of behavior towards forensic accounting was considered in this construct as
well as those included under Educational Activities.
A general rule, the more favorable the attitude and the subjective norm, and the
greater perceived control the stronger should the persons intention to perform the
behavior in question.
To further clarify the rationale of the adjusted TPB framework awareness and
perception were clearly differentiated. These two key metrics are typically done
together in the same tracking study to measure product strength in the market in the field
Product Brand Management. These differentiated meanings were adopted in this
research due to their parallel essences with forensic accounting as the product brand.
Accordingly, the concepts were described as follows:
Awareness would be how many people know my brand. Usually, awareness is
measured through surveys that ask participants a series of questions like What brand
comes to your mind if want ? without any kind of hint. For top brands like Coke,
McDonalds the awareness will be close to 100%.
Perception, on the other hand would be the values consumers attach to a
brand. For example, perception for Volvo will be safety. Survey will have questions
like How do you rank car brands in terms of safety? And various questions will be
asked on quality,
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performance, or green. Questions depend on what is goal for the brand and how you
want customers to think of your brand.
Thus, the research model assumed that awareness gives rise to perception.
The perception constructs were brought about by the level of awareness which affected
the intensity of intention to use timeliness and educational activities and ultimately
actual usage.
Awareness of the Existence of Forensic Accounting D
Existence Aims Fraud detection and

prevention
Perception
Perceived
Effectiveness of
Mechanisms
Extent
Perceived Benefits - Intent to use Usage
Perceived
Hindrances
Ease to do
Perceived behavior
control
-CPA practitioners
Figure 1: Research Model
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The following questions were framed to attain the objectives of the study.
1. What was the extent of awareness of the accountants as to:
the existence of forensic accounting;
aims of forensic accounting;
forensic accounting as a powerful mechanism in fraud detection and
prevention.
2. What was the level of perception of accountants on forensic accounting as to:
Perceived effectiveness of mechanisms
Perceived benefits of forensic accounting techniques
Perceived hindrances of the use of forensic accounting
Capability to apply forensic accounting in their practice
3. What was the degree of intent to use forensic accounting among the accountants in
terms of:
Timeliness
Educational activities
4. What was the extent of actual usage of forensic accounting among the CPA educators
of Holy Angel University?
Based from the statement of the problem stated, the hypotheses were assumed.
1. There was no significant relationship between the level of awareness and the
perceived effectiveness of accounting mechanisms.
2. There was no significant relationship between the level of awareness and
perceived benefits in the use of accounting mechanisms.

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3. There was no significant relationship between the level awareness and the
perceived hindrances in the use of accounting mechanisms.
intent of use (timeliness).
educational activities.
forensic accounting mechanisms in use. .
7. There was no significant relationship between the perceived effectiveness of
accounting mechanisms and the intent to use.
8. There was no significant relationship between the perceived benefits of
accounting mechanisms and the intent to use.
9. There was no significant relationship between perceived hindrances in the use
of accounting mechanisms and the intent to use.
10. There was no significant relationship between intent to use
(timeliness/behavior) and actual usage.
11. There was no significant relationship between educational activities and
actual usage.
The importance of the study came from its attempt, which might be widely
pioneering, to define forensic accounting method as a way of contemporary method and
employ this knowledge to reduce financial corruption cases, may be considered as an
outbreak that would many organizations. The initial conception of the idea to study
forensic accounting was born out of the need to enhance fraud prevention and detection
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in the Philippines. Fraud and corrupt practices have slowed down the pace of the
countrys development. The menace is rather existent in this country despite the
establishment of agencies to deter such occurrences.
The study is relevant in a sense that the fraud prevention and detection
mechanisms currently in use are not effective. This study could motivate Philippine
College and Universities to introduce Forensic Accounting courses in their
undergraduate curriculum or
find ways to offer it as a separate course. The Commission on Higher Education
(CHED) now has information at hand which could persuade accountancy departments
to include Forensic Accounting education in their curriculum before such departments
are accredited.
Method
Research Design
The research design used in this study is based on both survey and descriptive
methods. A descriptive research method is used when the researcher intends to describe
specific behavior as it occurs in the environment. Descriptive studies are usually the best
methods for collecting information that will demonstrate relationships and describe the
world as it exists. This research employed this research design to demonstrate the
levels of awareness and perception of the CPA faculty members on forensic accounting
and their influence on its usage in their accounting practice.
Surveys are commonly used to collect self-report data from the participants of
the study. The survey method was implemented to gather sufficient amount of primary
data by administering a questionnaire. One of the advantages of survey as a research

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design is that it allows the researcher to collect a large amount of data in a relatively
short period of time. (About Education, n.d.)
Participants
The study specifically examined certified accountants educators perceptions
regarding forensic accounting. For the purposes of the study, a certified accountant is an
accountant who holds a professional qualification in accounting. It was assumed that
certified accountants are more likely to be familiar with forensic accounting than an
accounting graduate without a professional qualification.
To address the research questions, 50 CPA accounting faculty members of
College of Business at Holy Angel University were selected as purposive samples, but
only 30 answered the questionnaires completely.
Procedure
Sampling Method. Due to the limited number of CPA accounting educators at
Holy Angel University, all of them were selected as respondents of this study. However,
a purposive or judgmental sampling was used instead because out of 47 CPA accounting
educators, only 30 completed the data in the questionnaire. This involves the selection of
samples which in the opinion of the researcher are representative in the sense that they
will provide the needed answers to the research question(s) thereby enabling the
researcher to meet the objectives of the study (Saunders, Lewis and Thornhill, 2009).
Instrumentation. Based on previous literatures, it is found that most studies
related to forensic accounting used a survey questionnaire as a data collection
instrument. Therefore, this study used the same method as the previous studies (Evaz
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zadeh and Ramazani, 2012; Koh, Arokiasamy,and Lee Ah Suat, 2009; Zadeh and
Ramazani, 2012; Ramadhan, 2015; Efiong, 2012).
To enhance the response rate and understanding of the expected respondents, the
questionnaire was designed such that questions and possible responses were arranged
correspondingly in columnar form. The purpose of the survey was clearly stated to
enable the respondents see the need to give accurate answers to the questions in the
questionnaire.
Copies of the questionnaire were distributed by hand to the entire population.
Only twenty six respondents completed and delivered the questionnaire to the
researcher. A response rate of 64% which is computed as the quotient of the number of
questionnaires answered completely to the number of questionnaires distributed. The
low response rate could be attributed to the lack of qualification of the teachers.
The questions in the questionnaire were divided into eight groups. The
questionnaire consisted of 8 parts namely, (A). Demographic attributes; (B). Fraud
detection and prevention mechanisms in usage in the Philippines; (C). Perceived
effectiveness of fraud detection and prevention mechanisms; (D). Awareness of Forensic
Accounting; (E). Perceived factors that hinder the use of forensic accounting in the
Philippines; (F). Perceived benefits of forensic accounting techniques; (G) Behavior
towards forensic accounting; (H). Educational activities.
Except for the first part which collected information about demographic profile
of the respondents, all the other parts used the 4 Likert-scale types of questions. The
scale values were adjusted according to the appropriateness of the needed response with
5 as the highest and 0 as the lowest value.

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Data analysis. The collected data were analyzed using the SPSS version 20.
Descriptive statistics and correlations among the research variables were computed. The
descriptive statistics were:
Percentage frequency distribution is a display of data that specifies the percentage
of observations that exist for each data point or grouping of data points.
Mean or average was used to estimate each of the center of a distribution of
values.
It is defined as the sum of all given values divided by the total number of values.
Correlational analysis is the use of statistical correlation to evaluate the strength of
the relations between variables. A strong, or high, correlation means that two or more
variables have a strong relationship with each other while a weak, or low, correlation
means that the variables are hardly related. The most widely used type of correlation
coefficient is the Pearson r, which is also referred to as linear or product-moment
correlation. The degree of relationship between the perception constructs and awareness
were computed. Similarly, correlational analysis was used to measure the relationship
between level of intention and educational activities and awareness were also calculated.
The list below represents how the computed correlation values were interpreted.
(Pearsons r Correlation- A rule of thumb, (n.d.)
If r = +.70 or higher Very strong positive relationship

+.40 to +.69 Strong positive relationship
+.30 to +.39 Moderate positive relationship
+.20 to +.29 weak positive relationship
+.01 to +.19 No or negligible relationship
-.01 to -.19 No or negligible relationship
-.20 to -.29 weak negative relationship
-.30 to -.39 Moderate negative relationship
-.40 to -.69 Strong negative relationship
-.70 or higher Very strong negative relationship
Running head: PERCEPTION ON FORENSIC ACCOUNTING 27
Results
Demographic Profile of Respondents
The demographic profile of respondents are presented in tables 1-4. The respondents
were predominantly males 17 (56.7%) and 13 (43.3%) were females.
Table 1
Gender of respondents
Gender N %
Male 17 56.7
Female 13 43.3
30 100
Most of them 22 (73.33%) were 21-35 years old. Those 36-45 years old constituted
20% (6) of the respondents. Two (6%) of the respondents were aged 46-55 years old.
Table 2
Age groups of respondents

N %
Age (in years)
21-25 9 30.00
26-30 7 23.33
31-35 6 20.00
36-40 3 10.00
41-45 3 10.00
46-50 1 3.33
51-55 1 3.33
30 100
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Additionally, the results indicated that 11 (37%) held BSA degree while 18 (60%)
were MBA graduates. Only 1(3.33%) was a PhD holder.
Table 3
Educational attainment of respondents

Degree N %
BSA 11 36.67
MBA 18 60
PhD 1 3.33
Total 30 100
One-third (9) of the number of respondents were relatively new in the profession with
only 1-5 years of practice. More than half (53.33%) had been in the profession for 6-15
years. Only a handful, 5 (16.67%) had 16-20 years of experience in the field.
Table 4
Number of years in the profession

No. of years N %
1-5 9 30
6-10 9 30
11-15 7 23.33
16-20 5 16.67
30 100
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Level of Awareness of Respondents
The level of awareness consisted of three aspects of measures namely; existence of
forensic accounting, aims of forensic accounting and power of forensic accounting
mechanism in fraud detection and prevention.
Level of awareness as to existence of forensic accounting. Results revealed that out
the 30 respondents, 25 (83.33%) claimed awareness of the existence of forensic accounting,
by indicating yes while only 5 (16.7%) percent) were not aware.
Table 5
Responses on the respondents awareness of existence of forensic accounting

Responses N %
Yes 25 83.33
No 5 16.67
Of those who answered yes they were aware of the existence of forensic
accounting, 15 (60%) replied highly aware while 6 (24%) indicated only moderately aware
and 4 (16%) replied low or very low. Table 6 presents the responses on this parameter of
awareness.
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Table: 6
Responses of respondents level of awareness of the existence of forensic accounting

Responses N %
Very low 2 8
Low 2 8
Moderate 6 24
High 15 60
Very high 0 0
Total 25 100
The results as to their level of awareness as to the aims of forensic accounting showed
that 25 (83%) strongly agree that they were aware that one of the aims of forensic
accounting is detection and prevention. Only 3 (10%) indicated agree with a mean of
0.13. Two (7%) respondent disagreed. The mean of their responses was 3.33
Table 7
Responses of respondents level of awareness of the aims forensic accounting

Responses N %
Strongly disagree 0 0
Disagree 2 7
Agree 3 10
Strongly agree 25 83
Total 30 100
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The responses as to the power of forensic accounting mechanism in fraud detection
and prevention showed that 25 (83%) strongly agreed while only 4(13% ) just agreed. 1
respondent did not agree. The mean rating of responses was 3.8.
Table 8
Responses of respondents level of awareness of the aims forensic accounting

Responses N %
Strongly disagree 0 0
Disagree 1 3
Agree 4 13
Strongly agree 25 83
Total 30 100
Level of Perception of Respondents
The responses on level of perception of respondents were organized into three groups
as indicated in the research paradigm (Theory of Planned Behavior). They were: Attitude
represented by perceived effectiveness of mechanisms; subjective norms represented by
perceived benefits and perceived hindrances; and perceived control represented by the
professional qualification and years of service of the respondents.
Perceived effectiveness of mechanisms of forensic accounting. The degrees of
intensity of effectiveness of forensic accounting mechanisms were measured in terms of the
mean value of the responses. The mechanisms that occupied the top five ranks as most
effective which were: corporate code of conduct and ethics policy (3.83), increased role of
audit committee (3.63), fraud prevention and detection training (3.63), inventory observation,
fraud auditing, staff rotation policy ethics officer had mean ratings equal to 3.60, financial
ratios (3.57), internal controls and discovery sampling , were both rated with a mean of 3.53.
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were top five in the list of effectiveness. On the other hand, forensic accountants,
operational audit, whistleblowing , code of sanctions against suppliers/contractors and
surveillance equipment were the garnered the lowest mean ratings at 2.87. The overall mean
of the mechanisms was 3.22. Table 9 shows the complete list of ranks and means of the
mechanisms.
Table 9
Ranking of the Perceived Effectiveness of Fraud Prevention and Detection Mechanisms

Mechanism Mean Rank
Corporate code of conduct and ethics policy 3.83 1
Increased role of audit committee 3.63 2
Fraud prevention and detection training 3.63 2
Inventory observation 3.60 3
Fraud auditing 3.60 3
Staff rotation policy - Ethics officer 3.60 3
Financial ratios 3.57 4
Internal controls 3.53 5
Discovery sampling 3.53 5
Firewalls 3.30 6
Virus protection 3.27 7
Data mining 3.20 8
Digital analysis software 3.17 9
Password protection 3.07 10
Reference check on worker 3.07 10
Bank reconciliation 3.00 11
Fraud reporting policy 2.97 12
Fraud vulnerability reviews 2.97 12
Fraud hotline 2.93 13
Ethics training 2.93 13
Security department 2.90 14
Forensic accountants 2.87 15
Operational audit 2.87 15
Whistle blowing 2.87 15
Code of sanctions against 2.87
suppliers/contractors 15
Surveillance equipment 2.87 15
Overall Mean 3.22
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Perceived benefits of using accounting techniques. Among the perceived benefits
of using accounting techniques, the respondents ratings showed that forensic accounting
will be sustained with a mean of 3.86 followed closely by forensic accounting prevents
fraudulent behavior with a mean of 3.80. That forensic accounting can instill ethical
behaviors was relatively moderate. Although they agreed that financial fraud can be
prevented or reduced, the mean of this benefit was merely 3.07 with forensic accounting
techniques can recover losses as the least rated at 3.0. The overall mean of the benefits was
3.49. The mean ratings and ranking of the benefits are shown in table 10.
Table 10
Ranking of the ratings of the perceived benefits of using forensic accounting

Fraud detection and prevention mechanism Mean Rank
Forensic accounting will be sustained 3.86 1
Forensic accounting prevents fraudulent behavior 3.80 2
Forensic accounting can instill ethical behaviors 3.70 3
Financial fraud can be prevented or reduced 3.07 4
Forensic accounting techniques can recover losses 3.0 5
Overall mean 3.49
Perceived hindrances in the use forensic accounting. Similarly, the level of
perception of the respondents with regard to the factors that hinder the usage of forensic
accounting was measured in terms of the composite mean of the identified barriers. The
respondents ratings showed that too much centralization of authority gathered the highest
mean at 3.90. It was narrowly followed by inadequate professional forensic accountants

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with a mean rating of 3.87. The two factors: Technology is needed and inadequate
educational system ranked third with their mean rating of 3.13. The least hindrances rated
(3.03) were inadequate experience of forensic accountants and inadequate transparency.
The overall mean rating of the benefits was 3.19
Table11
Ranking of the ratings on perceived hindrances in using forensic accounting

Perceived hindrances Mean Rank
Too much centralization of authority 3.90 1
Inadequate professional forensic accountants 3.87 2
Technology is needed 3.13 3
Inadequate educational system 3.13 3
Inadequate infrastructural base 3.10 4
Inadequate rule of law 3.10 4
The judicial system 3.10 4
Fiscal indiscipline 3.10 4
Impunity of politicians 3.10 4
Inadequacy of quality forensic analysis 3.07 4
Lack of continuity of fraud investigating agencies 3.07 5
Inadequate training institution 3.07 5
Institutional corruption 3.06 6
Inadequate experience of forensic accountants 3.03 7
Inadequate transparency 3.03 7
Overall mean
3.19
Perceived behavioral control. The parameters which embodied this cluster of
variables were: educational qualification and length of experience in the profession.
Educational qualifications: For purposes of analysis, the educational qualifications
of the respondents were converted into arbitrary descriptive values as follows: BSA = 2;
MBA= 3; PhD = 4. The results showed that overall mean for educational qualification 2.67.
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Table 12
Educational qualifications of respondents

Degree Descriptive value N Mean of descriptive
value
BSA 2 11 22
MBA/MBM 3 18 54
PhD 4 1 4
Total 30 M = 80/30 = 2.67
Length of service: Correspondingly, the years in the profession were converted as: 1-
5 years = 1; 6-10 years = 2; 11-15 years = 3; 16-20 years = 4. The overall mean was
computed at 2.27.
Table 13
Years of practice of the profession of respondents

Years Descriptive value N Mean of descriptive
value
1-5 1 9 9
6-10 2 9 18
11-15 3 7 21
16-20 4 5 20
Total 30 M = 68/30 = 2.27
Intent of usage of forensic accounting
Timeliness. This group measures the time frame the respondents intended to use
forensic accounting. These measures were: current, near future, soon, possible.
With regards to group of responses on the timeliness of the use of forensic
accounting, the mean rating was highest on the possibility to use forensic techniques (3.76).
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The intent to use in the near future ranked second (3.63). Current using and will soon
acquire its services were rated equally at 3.60. Table 14. lists the items on timeliness of
forensic accounting with their corresponding mean and rank.
Table 14
Responses on the intent to use forensic accounting techniques

Intent to use Mean Rank
Possible to use forensic techniques 3.76 1
Intend to use in the near future 3.63 2
Will soon acquire its services 3.60 3
Currently using 3.60 3
Overall mean 3.65
Educational activities. The result of the respondents position on what activities
could enhance the awareness of forensic accounting, shows that seminar/workshops were
rated highest with a mean ratings of 3.90. Teachings/research came close at mean ratings
equal to 3.86. Least rated were conferences (mean =3.13).
Table 15
Responses of respondents on the educational activities regarding forensic accounting

Activities Mean Rank
Seminars/workshops 3.90 1
Teachings/research 3.86 2
Conferences 3.13 3
Overall mean 3.65

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Extent of use of forensic accounting.
This measured the actual observable behavior that the respondents were already
engaged in. The fraud prevention and detection mechanisms that they claimed to employ in
their profession accounted to determine the extent of use of forensic accounting.
The mechanisms rated as most widely used were password protection, reference check on
worker, code of sanction against suppliers/contractors were the top three (means are 3.60,
3.50, 3.33). The mechanisms which were rated least employed were: whistle blowing (2.23),
fraud reporting policy (2.23), fraud hotline (2.13), and surveillance (1.90).
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Table 16
Ranking of fraud prevention and detection mechanisms in usage

Mechanism Mean Rank
Password protection 3.60 1
Reference check on worker 3.50 2
Code of sanctions against suppliers/contractors 3.33 3
Internal controls 3.23 4
Operational audit 3.23 4
Corporate code of conduct and ethics policy 3.20 5
Forensic accountants 3.17 6
Virus protection 3.13 7
Inventory observation 3.00 8
Digital analysis software 2.90 9
Fraud auditing 2.87 10
Discovery sampling 2.80 11
Security department 2.80 11
Fraud prevention and detection training 2.80 11
Data mining 2.77 12
Firewalls 2.73 13
Rank reconciliation 2.60 14
Ethics training 2.60 14
Fraud vulnerability reviews 2.57 15
Financial ratios 2.47 16
Increased role of audit committee 2.33 17
Staff rotation policy - Ethics officer 2.33 17
Whistle blowing policy 2.23 18
Fraud reporting policy 2.23 18
Fraud hotline 2.13 19
Surveillance equipment 1.90 20
Overall mean 2.79

Relationships of variables
Pearson r values were computed to determine the relationships between the variables
as hypothesized. The results are shown in detail in Appendix E
A. The first group of correlation values were calculated to measure the degree of
relationships between the level of awareness and perception, intent to use (behavior) and
actual usage (forensic accounting mechanisms in use). Results revealed that the level of
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awareness was very strongly related (. 902) with intent to use. It was also found that it was
strongly related with actual usage at r= .405. Perceived effectiveness showed a moderately
significant (.342) relationship with awareness. However, awareness was weakly correlated
with perceived benefits of forensic accounting (.293) and perceived hindrances in the use of
forensic accounting (.019). The relationship between awareness and educational activities
turned out to be very strongly insignificant.
Table 17
Correlation between the level of awareness and the level of perception variables
Combination Correlation Relationship
Coefficient
Awareness and perceived effectiveness .342 Moderate relationship
Awareness and perceived benefits .293 Weak relationship
Awareness and perceived hindrances .019 No relationship
Awareness an intent of use .902 Very strong relationship
Awareness and educational activities -.084 Very strong negative
relationship
Awareness and actual usage .405 Strong relationship
B. The second group of correlation values were calculated to determine the degree of
relationships between the level of perception, intent to use (behavior) and actual usage
(forensic accounting mechanisms in use). A very strongly significant relationship between
perceived effectiveness (.463) and intent to use was found along with perceived benefits
(.405). The extreme opposite was found in the relationship between perceived hindrances and
intent to use (-.063).

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Table 18
Correlation between the level of perception and the intent to use forensic accounting
Coefficient
Perceived effectiveness and intent to use .463 Strong relationship
Perceived benefits and intent to use .405 Strong relationship
Perceived hindrances and intent to use -.068 Very strongly negative
relationship
C. The third group of correlation values were computed to determine the degree of
relationships between intent to use and actual usage. Intent to use as to timeliness was found
to have a strong significant relationship (.506) with actual use of forensic accounting.
However, a negligible relationship (.085) was found in the case of intent to use and
educational activities.
Table 19
Correlation between intent to use to actual usage of forensic accounting

Coefficient
Intent to use and actual usage .506 Strong relationship
Educational activities and actual usage .085 Negligible relationship
Discussion
This study sought to explore the awareness, perception, and usage of forensic
accounting among CPA practitioners who were also college faculty members at Holy Angel
University. The objective of this research was to illustrate a similar concept in brand
marketing management called the hierarchy of effects, where customers must first become
aware of a product, then they develop perception or attitudes and ultimately customers
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purchase and experience the product (Farris, P., Bendle, N., Pfeifer, P., Reibstein, D. J.,
2006). By the same reasoning, awareness of forensic accounting could affect the
perception of accounting practitioners who would in turn enhance the use of this much
needed specialized area of accounting to prevent fraudulent activities in business. There were
30 respondents who were largely males mostly lower than 40 years old. They were
predominantly masters degree holders in business management with almost 1-10 years in the
accountancy profession.
The level of awareness of the respondents was high as with more than 83% of them
aware of its existence, its aims rated at 3.33 mean rating; and they agreed in its power as a
forensic accounting tool which they rated very high at an overall mean of 3.8 almost the
perfect rate.
Since perception was assumed to be influenced by awareness, it was measured on
three aspects namely, perceived effectiveness of fraud prevention and detection mechanisms
of forensic accounting, perceived benefits of forensic accounting and perceived hindrances
on the use of forensic accounting.
The respondents valued corporate code of conduct and ethics policy as the most
effective tool followed by increased role of audit committee as well as prevention and
detection training. Perhaps, these were the tools that they usually apply or implement in their
practice. Among those least effective were forensic accountants, operational audit, whistle
blowing, code of sanctions against suppliers/contractors, and surveillance equipment. The
respondents might have found these tools to bring about unfavorable consequences and they
were more restrictive in using them. These described the attitude component of the research
model.
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The respondents indicated that the benefits of forensic accounting would persist and
they would be useful to prevent fraudulent behavior as well as instill ethical behaviors.
However, they claim that its capability to prevent financial fraud and recover losses would
not be as significant. This described one of the subjective norms of the research model.
The respondents attributed the greatest barrier in using forensic accounting to too
much centralization of authority and inadequate professional forensic accountants. As
accountants, the respondents claimed the former as the greatest hindrance because of their
unhappy dealings with the government agencies such as the Bureau of Internal Revenue.
The latter might have been due to the absence of forensic accounting courses offered in the
Philippines. Besides they might have been called to handle the work of forensic accountants
even if they were not trained in the field. Those least cited as perceived hindrances in the use
of forensic accounting were inadequate experience of forensic accountants and inadequate
transparency. They might have rated the former as least barrier in the use of forensic
accounting because they considered themselves self- sufficient in dealing with fraudulent
activities The latter mechanism not a strong hindrance because the respondents might have
developed techniques to surpass problems on transparency. This discussion described another
subjective norm of the research model.
Another part of the research paradigm which would be discussed here was perceived
behavioral control (ability to perform or handle the field) which was represented by the
respondents educational qualifications and length of practice in the profession. The
capability of the respondents might be sufficient to develop themselves in forensic
accounting because they were mostly holders of masters degree in management and had a
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bachelors degree in accountancy. Additionally, 70% of them had more than 5 years of
experience in the field although they were relatively young.
The intention to use forensic accounting was assumed to be influence by the degree of
perception of the respondents. In this research timeliness was one parameter of intent to use.
The respondents revealed a strong intention to use forensic techniques because the overall
mean of their responses was 3.65 very close to the perfect value of 4. However, there were
more responses on the possibility of using it rather than soon or in the near future and
least preferred was current usage.
Educational activities which the respondents considered as most effective in forensic
accounting education were through seminars and workshops. Teachings and researches were
less preferred. This might be explained by the wider exposure of the respondents on these
types of professional enhancement methods. Teachings and researches were less preferred
maybe because they were more time consuming. Conferences were relatively least desired
because they could be expensive and might require far venues. Nevertheless, educational
activities were favored by the respondents since they gave an overall high mean rating (3.65)
on them.
The ultimate importance of awareness and perception was the actual usage of forensic
accounting. The most widely fraud prevention and detection mechanisms used by the
respondents was password protection. This might be due to their pervasive use of devices
where passwords were the most accessible way of protecting information. Reference check
on worker came close as second choice. Reference checking was a common practice and
information could be easily accessed due to modern equipment that accountants are presently
equipped. Fraud hotline and surveillance equipment were selected as the least in use maybe
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because the former could not be access easily and could be hacked anytime. The latter was
not usually used because of its limited applicability in accounting.
Discussing the degree of relationships of variables would explain the rational basis of
the research paradigm. Accordingly, the level of awareness could affect the level of
perception which could result in the intent to use and would finally lead to actual usage.
The awareness variables showed a weak positive relationship (.210) on perception
although a moderate effect was found on perceived effectiveness. The level of awareness had
no relationship with perceived hindrances. This might be explained by the possible
respondents concern on effectiveness than other aspects of perception. They might not have
been too intent on benefits and hindrances of forensic accounting.
The level of awareness showed a very strong positive impact on the intent to use. On
the contrary, it did not influence the choice of educational activities. This could be attributed
to the lack of distinction between the traditional accounting course and forensic accounting.
The level of awareness exhibited a strong positive relationship with actual usage. This could
be explained by the respondent s knowledge that the mechanisms they were employing were
actually forensic accounting techniques.
Perception variables were positively related with intent to use except for perceived
hindrances. Intent to use was not deterring by perceived hindrances. This could be due to the
respondents of awareness of perceived hindrances as mentioned above.
The degree of intent to use strongly influenced actual usage as shown by the high
coefficient of correlation between them. This meant intent to use could be a reliable sign of
actual use. However, educational activities were not related with actual usage. This could
mean that educational activities would not contribute to actual use.

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Limitations of the study
This research had some limitations. It was primarily limited by its sample size since it
was focused in one school. The sample size could have been expanded by including
accounting educators from other universities in the region. It could also include business
establishments and government agencies. The questionnaire should have been designed with
more clarity and relevance. The SPSS statistical output should have been analyzed more
deeply to obtain a greater depth of information.
Conclusion
In a nutshell, this research confirmed that the level of awareness of forensic
accounting could result in a favorable perception of the field which could lead to intent to use
and consequently actual usage. Just like a product brand, higher level of awareness could be
an effective way to bring about greater perception (preference) and its application to curtail
fraudulent activities in businesses and the government where such destructive activities are
widespread.
This study provides insights into definition, research problem, literature review on the
field of forensic accounting such as forensic accounting functions, forensic accounting
education, and research framework. Forensic accounting is important for all organization
sizes and not limited to for small firms. In todays society, organizations have begun to
consider forensic accounting as a component towards their survival.
Future Research
Research is needed to investigate the extent of growth of forensic accounting services
and the growth in demand for such services. It would also be interesting to investigate the
provision of forensic accounting services provided by professional organizations such as

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auditing firms, attorneys, investigators, and security firms. Further research could also
examine the relevant skills that a forensic accountant should possess. These could be looked
at from the point of view of academicians, practitioners and users of forensic accounting
services. A research regarding the feasibility of offering forensic accounting in universities
can be conducted.
Recommendations
In order to bring a high level of awareness make people understand the significance
of forensic accounting as a preventive-detective-investigative tool to check on fraudulent
activities, the following are recommended:
1. Conferences, seminars and training programs need to be organized to enhance skills
and ability of professional accountants in forensic issues.
2. More research should be undertaken in the area of forensic accounting so that
adequate information on the subject matter could be gathered for the expansion of
knowledge (awareness).
3. Forensic accounting may be integrated into academic curriculum of universities as a
means of increasing awareness of the subject matter.

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Forensic Accounting Research of Mr. Gian Carlo N. Catahum

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Running head: PERCEPTION ON FORENSIC ACCOUNTING 1

Awareness, Perception and Usage of Forensic Accounting among CPA Accounting

Educators at Holy Angel University

Gian Carlo N. Catahum

Holy Angel University Graduate School of Business

January 19, 2016

Awareness, Perception and Usage of Forensic Accounting among CPA Accounting

Educators at Holy Angel University

Gian Carlo N. Catahum

Keywords: Fraud prevention and detection, awareness, perception

implications are constructed by social actors in a society. However, accounting figures

Insurance, Ansett and Pan Pharmaceuticals in Australia) have undermined investors'

financial reporting, accounting standards and accountability.

These concerns made forensic accounting an attractive career opportunity in

fraudulent activities within organizations.

Ramazani and Hossein Refiie Atani (2010), examined accountants perception of

perception of forensic accounting.

accounting techniques in fraud prevention and detection, (3) examining practitioners

opinions and behavioral intention to use forensic accounting techniques in fraud

prevention and investigation, (4) exploring the level of awareness of forensic

accounting techniques and (5) examining the readiness of universities in taking up

forensic accounting courses.

the fraud menace.

Nature of Forensic Accounting

(Chopra, 2009), describes Forensic accounting is a special domain of

accountancy that incorporates accounting principles and investigation techniques to

investigating crimes within the field of finance.

establishment of facts or evidence in a court. (Wikepedia, n.d.).

testify at a bankruptcy hearing.

Modern forensic accounting focuses on 3 main areas: litigation support, forensic

accounting investigation, and dispute resolution.

Litigation support. Legal litigation support represents the descriptive

presentation of financial issues related to existing or pending legal proceeding. The

forensic accounting professional determines damages sustained by parties involved in

witness. (Forensic Accounting Demystified, n.d.)

Forensic accounting investigation and dispute resolution. Forensic accounting

investigation is the process of deciding whether criminal matters such as internal

employee theft, securities fraud (including falsification of financial statements), identity

risk of loss. (Forensic Accounting Demystified, n.d.)

order to manipulate or deceive a company or individual. Accounting fraud is an act of

act upon it to commit fraudulent activities in the company.

many ways an employee can misuse and abuse the system.

The types of fraudulent activity which plague most businesses are:

Asset misappropriation. Pertains largely to different types of theft within an

victim of the fraud knows what happened.

register after closing up shop, this is a common form of asset misappropriation.

theft can be illustrated by the classic dine-and-dash or turnstyle-jumping scenarios.

Essentially, someone takes advantage of a service without paying for it.

large sums of money to certain parties in order to influence decision-making, and

corruption can involve everything from kickbacks to shell company schemes.

Financial statement fraud. Often carried out at the upper-

management/executive levels, financial statement fraud is a deliberate misrepresentation

of data in order to give a false impression of the companys financial strength to

this fraudulent activity are:

Embezzlement. It is also called larceny, which is the illegal use of funds by a

person who controls those funds

Internal theft. It is the stealing of company assets by employees.

other benefits in exchange for access to the companys business.

other benefits in exchange for access to the companys business.

The Forensic Accountants and Auditors

accountants find out the fraudulent statement deliberately.

Forensic accountants are hired to investigate, analyze, interpret, summarize, and

hence, they serve as expert witnesses. (Wikipedia, n.d.)