Talking about legal accounting
Abstract:In today's market economy and legalization,
forensic accounting, a marginal discipline at the
intersection of accounting and law, has developed rapidly
in the world. This paper introduces the development of
forensic accounting, expounds the concept and theory of
forensic accounting, and analyzes the necessity of the
development of forensic accounting in our country.
Key words: forensic accounting; Conception; necessity
1. Overview of the development of forensic accounting
Modern forensic accounting first originated in the United
States, and one view is that American forensic accounting
can be traced back to the forties of the last century. The
reason is that during World War II, FBI in the United States
employed more than 500 accountants as agents to
inspect and monitor financial transactions totaling
approximately $53.8 billion, which can be called the
earliest forensic accounting practice in history. American
Merrick Pallebott first used the term "forensic accounting"
in 1946. Another view is that forensic accounting first
appeared in the United States in the late 70s and early
80s of the 20th century, and its emergence was mainly
related to the internal stock fraud cases and scandals in
the savings and credit industry at that time. These fraud
cases are largely realized through accounting fraud, which
not only causes great losses to the interests of investors,
but also causes the public to lose confidence in the
economic order. The government, in order to change the
situation, investigated the events of these economic
scandals, which led to the emergence of this new
discipline.
Forensic accounting has developed quite rapidly in
Western developed countries, and the forensic
accounting profession has become a specialized
profession in society. According to reports, one of the 18
hottest occupations in the United States is forensic
accountants, and more and more forensic accountants
are hired by relevant departments to conduct
investigations and audits. The accounting circles in
Europe and the United States have begun to carry out
extensive research on forensic accounting
Papers and monographs on this topic are also emerging.
In recent years, the United States has also launched a
number of forensic accounting journals covering
accounting fraud, auditing, taxation, etc. The world-
famous "Big Four" accounting firms have also paid special
attention to this issue, not only setting up scientific
research groups, but also setting up forensic accounting
departments to meet the needs of society.
2. What is forensic accounting?
1. The concept of forensic accounting
Canadian accountants such as Scott, G. Jack Bellogoni, Robert
J. Lindquist, Gaidi, Li Ruoshan and Dai Deming have done a lot of
research on the concept of forensic accounting and given
definitions from different perspectives. Based on their views, it
can be concluded that forensic accounting is an emerging
discipline in which a specific subject uses accounting knowledge,
financial knowledge, audit technology and investigation
technology, legal knowledge and other related knowledge to
interpret and deal with the relationship between legal issues in
financial matters, and put forward its own expert opinions as
legal appraisal or testimony in court for legal issues in economic
disputes.
2. The content and service areas of forensic accounting
The scope or content of forensic accounting depends on
the perfection of the legal system of each country and the
detailed provisions of laws and regulations on economic
activities, economic behavior, property, resources, etc.
Therefore, the scope of forensic accounting will vary from
country to country and from country to country. our
country The current forensic accounting should include
:(
1)
corporate tax accounting (tax actuarial accounting
); (
2)
Accounting for creditor's rights and debts
; (
3) Insurance
compensation accounting
; (
4) Average accident actuarial
accounting
; (
5) Social justice accounting
; (
6) Price
accounting
; (
7) Fund accounting
; (
8) Division
Law and accounting. To sum up, forensic accountants
mainly exist in three major fields: enterprises and
institutions, social intermediary service agencies, public
prosecutors and law enforcement agencies and other
judicial organs.
Regarding the content and service areas of forensic
accounting, there can be broad and narrow, concrete and
abstract, but one thing is certain, that is, forensic
accounting mainly revolves around investigative
accounting and legal support. The former mainly
investigates suspected criminal acts, such as
embezzlement and theft of unit property, accounting
fraud, securities fraud, insurance fraud, bribery, kickbacks,
etc. The latter provides litigation assistance to
accountants, auditors, judicial personnel, lawyers, etc. in
legal proceedings that have occurred or will occur, mainly
involving economic losses and property division.
3. The necessity of accelerating the development of
forensic accounting in our country
Several Regulations on the Trial of Civil Compensation
Cases Caused by False Statements in the Securities
Market
The "Regulations" stipulates in detail the civil
infringement compensation system in the securities
market, which has had a significant deterrent effect on
the current increasingly serious accounting information
fraud. However, during the trial, due to the considerable
complexity of accounting expertise, it exceeded the
relevant professional ability of judges to a certain extent,
leaving many cases still unresolved. There are two key
problems here: First, there is no clear standard for how to
determine whether the accounting information provided
by the enterprise is false. At present, accounting
professionals usually rely on professional standards, that
is, whether they comply with accounting standards and
accounting systems, as long as they meet this standard,
regardless of whether the content reflected in the
accounting information is different from the facts, it
cannot be recognized as false information; As non-
accounting professionals, because they are not familiar
with complex professional standards, their identification
of false accounting information is more intuitive, as long
as the content reflected in the accounting information is
different from the facts, it is considered false information.
It can be seen that professionals emphasize the process
of accounting, not professionals
is the result. Second, it is difficult to legally define
whether the cause of false financial reports is intentional
or negligent. It is very important to distinguish between
intention and negligence when sentencing those
responsible for false accounting information, the former
must bear not only civil liability but also criminal liability,
while the latter only needs to bear criminal liability. To
define whether the generation of false accounting
information is intentional or negligent, it is sometimes
difficult for even professionals to distinguish, let alone
judicial personnel.
Let's take a look at a case of combining law and
accounting:
A fire broke out in a textile factory in a county.
According to the factory's declaration, 6 tons of cotton
yarn worth 180,000 yuan stored in the warehouse were
burned, and the factory claimed compensation from the
county insurance company. After the insurance company
accepted the case for investigation, it was found that the
6 tons of cotton yarn had been treated as a loss in the
factory's accounting account. The forensic accountant of
the county insurance appraisal center provides from the
different perspectives of the policyholder and the insurer
Legal support and the help of the investigation
accountant, while re-collecting evidence and verifying
claims. According to the current financial laws and
regulations, the forensic accounting technology method is
used to check the balance of the "inventory" account, and
according to the terms of the insurance contract, it is
analyzed and demonstrated, and finally it is determined
that although there are traces of burned cotton yarn in
the warehouse, because the 6 tons of cotton yarn
declared burned by the factory are not within the scope of
insurance liability in the event of a fire, it will not be
compensated. In this way, it not only avoids a mistaken
claim by the insurer (county insurance company), but also
eliminates the insured's (county textile factory) doubts
about whether the burned cotton yarn can be
compensated.
It can be seen that it is very necessary to accelerate
the development of forensic accounting in our country,
mainly manifested in the following points:
1. The correct implementation of the new Accounting
Law requires accounting talents who understand both
accounting and law - forensic accounting talents. To
correctly implement the new Accounting Law, we need to
make many efforts in all aspects, such as cultivating the
legal awareness of enterprise leaders and improving
enterprise accountants
professional ethics and strengthening the trial level of
judicial personnel. However, as an important tool for the
implementation of the new Accounting Law, forensic
accounting is still developing slowly, and even many
accounting theorists or professionals know little about it,
which brings certain obstacles to the in-depth
implementation of the new Accounting Law.
2. The definition of the implementation of the norm of
economic conduct by the law must be quantified and
proved through accounting information and accounting
evidence, and the only thing that can make the
combination of law and accounting apply is forensic
accounting. In this case, only those with independent
professional qualifications can make a professional
appraisal of the relevant accounting information or
related events from a professional and legal perspective.
3. Simple accounting professional knowledge, when the
economic interests of all parties conflict, the limitations
of economic information interpretation promote the
development of forensic accounting. In recent years, our
country has not only strengthened the supervision of
economic activities, but also promulgated accounting
standards that are twice as many times as in previous
years, striving to make the accounting language reflect
complex economic phenomena as truthfully as possible,
so that accounting information users can not only make
correct decisions, but also strengthen the control of
social and economic activities through the accounting
information system. However, no matter how hard the
government works, in the face of the complexity and
diversification of the economic process, the accounting
day, which should have the role of control and reflection,
is weak. Therefore, the development of modern
accounting should meet the requirements of the
legalization of social and economic development, not
only requiring accounting to solve conventional problems
such as measurement and accounting at any time, but
also effectively solving special problems such as property
liquidation of bankrupt enterprises, insurance claims,
division of losses from average accidents, and
embezzlement of collective property. Existing accounting
theory and practice cannot meet this social need.
4. The weakening of modern audit functions is also a
necessary factor to accelerate the development of
forensic accounting. As users of audit reports, they
always expect CPAs to inform the report users of possible
risks in advance before the bankruptcy of the enterprise.
CPAs, on the other hand, believe that their main
responsibility is to perform audit work in accordance with
generally accepted auditing standards and only express
their position on the fairness of financial statements.
Therefore, the gap between public expectations and the
ability of certified public accountants is widening. In order
to shorten this gap and strengthen communication, it is
necessary to have independent professionals interpret
relevant accounting information and events from the
standpoint of a third party from a professional and legal
perspective, and the person engaged in this work is the
forensic accounting staff.
References:
[1] Gai Di Zhang Jingfeng: A Review of Forensic
Accounting Research. Accounting Research, 2003.5.
[2] Sun Yujing: Thoughts on the Development of Forensic
Accounting Education. Friends of Accounting. 2008（27）.
[3] Zhang Sutong: Introduction to American Forensic
Accounting and Its Enlightenment. Accounting Research,
2004. 7.
[4] Zhao Youli Sun Qiguang: The Development of
Forensic Accounting in our country [J]; Agricultural
economy. 2010.04.
