This study attempts to propose an integrated framework for the use of Forensic Auditing to detect and prevent financial fraud in the Egyptian environment.
The importance of this research in the following aspects:
First, the scientific side: that presented in the following points:
1. This research deals with relatively modern subject, and that its importance has appeared since the collapse of the greatest companies, and the increasing of financial crimes, and fraud in the financial statements, and financial corruption in the companies at the local level and global level.
2. The rarity of scientific and academic studies in Egypt, in spite of the growing interest at the international level.
3. Reduce the expectations gap in an attempt to restore confidence in the audit judgments.
Second, the practical side: that presented in the following points:
1. Reducing fraud and financial corruption in firms, and litigation support, and reducing the rate of financial crimes.
2. To reassure users of financial statements about the absence of fraud or deception in the financial statements.
The researcher used an inductive and analytical methods to access logical results to support the study hypotheses based on the professional practice among the study sample in Egypt.
The plan of this research is in seven parts, as follows:
First part: general framework of the research.
Second part: theoretical study of the research.
Third part: the phenomenon of fraud as one of the main reasons for the appearance of Forensic Auditing.
Fourth part: rooting and descriptions for Forensic Auditing.
Fifth part: the professional practice in the Egyptian environment that related to the Forensic Auditing and the possibility of its application.
Sixth part: the applied study in the Egyptian environment.
Seventh part: Results, recommendations and proposed future researches.
After viewing the general framework of research, the second part discussed the previous studies that related to the research which can be divided into the following categories:
1. First, studies that discussed the fraud and manipulation in financial statements.
2. Second, studies that discussed the professional description of Forensic Auditing.
3. Third, studies that addressed the role of Forensic Auditing in the detection of fraud, with the application on some countries.
While, the third part discussed, the fraud as one of the main reasons for the appearance of Forensic Auditing.
The Fourth part discussed the rooting and professional description of Forensic Auditing, through the presentation of the features, importance, definitions, application areas, and objectives of Forensic Auditing, and the qualifications of auditors who perform the Forensic Auditing.
The Fifth part discussed the professional practice in the Egyptian environment that related to the Forensic Auditing and the possibility of its application, and then the proposed integrated framework for the use of judicial audit in the Egyptian environment.
The sixth part dealt with the applied study in Egyptian environment, as follows:
• First, the applied study method.
• Second, determine the study sample.
• Third, view and analyze the results of the questionnaire and test hypotheses, using a combination of various statistical tools.
The seventh Part viewed the results, recommendations and future research.
The most important results of the study were the following:
1- The main reasons for the appearance of Forensic Auditing, are as follows, the prevalence of fraud in the financial statements, increasing of financial corruption in various companies, presence of the expectations gap in the process of auditing, meeting the need for the judiciary to experts or consultants who make opinions and report about financial irregularities, and reassure stakeholders on the financial position of the companies.
2- Both theoretical and Applied studies agreed on the importance of Forensic Auditing as a corner stone in discovering and preventing fraud in the Egyptian environment as it narrows the expectations gap and improves the efficiency of corporate governance.
3- The four study samples agreed on the provision of the proposed frame for Forensic Auditing in various Egyptian companies to discover and prevent fraud and corruption and, hence, Increases the efficiency and effectiveness of the Auditing process.
Based on these findings, the study makes the following recommendations:
Professional organization in Egypt should activate the requirements of the proposed framework by establishing an independent official professional society for Forensic Auditing, which should prepare valid professional description with suitable standards that could be applied in Forensic Auditing in the Egyptian environment.
Integration of the work of Forensic Auditor and accounts auditors as a transitional phase until the former is sufficiently qualified so that he could perform the Forensic Auditing independently.
Addition of Forensic Auditing to the services package offered by accounting and auditing firms in Egypt , Adoption of the current orientation to eradicate fraud and corruption phenomena in the Egyptian companies.
The researcher believes the importance of the following future research:
An exploratory study of the impact of the use of Forensic Auditing in meeting the requirements of the law of Sarbanes-Oxley.
A comparative study of the effects of the teaching of the Forensic Auditing on job opportunities for graduates in the Arab and Egyptian environment.
An analytical study of the role of Forensic Auditing in the detection of tax evasion in Egypt.
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