Forensic-MT Essay Example | Topics and Well Written Essays - 500 words

Forensic-MT - Essay Example As the U.S. corporate sector reporting is plagued with continuum of frauds and deliberate accounting errors and manipulation and most of these cases are pending in the courts for due decisions. The need for forensic accounting becomes undoubtedly at its peak as accountants and lawyers seek supportive evidence which is rather factual rather than opinion based. The legal proceedings have become lengthy and complex as businesses and transactions are becoming complicated with too much information in terms of the ways they are carried out and information related to them is dispersed and difficult to gather. Forensic accountants or lawyers need to be competent and knowledgeable to identify weaknesses in the reporting system and prepare the factual documentation regarding an issue or a transaction which is being challenged in the court. The role of companies audit committees and external auditors are challenged by plaintiffs including regulatory bodies, stakeholders, creditors and general public in fraud cases. The outcome of this severe criticism was the introduction of the SOX 2002. The SOX requires auditors to carry out their audit engagement responsibilities in accordance to the ‘auditing and related professional standards’ laid out by PCAOB (PCAOB, 2004). Companies hire forensic accountants not only to provide litigation support but also to help them in managing their internal reporting. Auditors are now required to audit management’s assertion on the effective of internal controls over financial reporting (PCAOB, 2007). Information systems are integral part of internal reporting and data should be made accessible to auditors who need to carryout tests to assure the effectiveness of the system and completeness of information managed and generated. Additionally, auditors should acquire written confirmation representation of control