The increasing awareness of financial crimes is growing the demand for forensic accountants to help detect illegal financial activity by companies, individuals, and organized crime rings. No matter how much fraudulent activity increases, there should always be an anti-fraud scheme to protect it. To provide balance availability and protection from illegal business actions is the main reason why Forensic Accounting (FA) exists.
With the urgent need for Forensic Accounting as a tool to combat fraud, this article discusses its application in countries with unclear business practices, investigates accessible ways that will help introduce it to the culture, and finds areas where it is much needed especially in countries -Countries with financial cloudiness and opacity.
The results are based on quantitative and qualitative studies in Lebanon because it is considered an opaque country, having the same characteristics that define countries with fraudulent financial behavior that suffer from high levels of financial corruption such as money laundering, lack of transparency, or adequate finance. disclosure. and corruption at the management, supervisory board and even government levels.
The results of the study reveal that Forensic Accounting is considered a means to overcome fraudulent behavior. Most of the respondents agreed or strongly agreed about the need to include it for fraud prevention and for detection purposes as a key requirement.
However, respondents consider this new in Lebanon with the highest percentage of people (56.36%) reporting that it is not used by Lebanese companies due to lack of awareness, privacy concerns, nature and type of business (family businesses and SMEs), lack of guidelines regarding standards (local or international) that must be implemented and there is no appropriate regulation.
However, respondents showed a positive attitude towards implementation in Lebanon as a financially corrupt country. So with an encouraging perception among the respondents, problems persist in the introduction and diffusion of Forensic Accounting.
The results of the study also support the idea of making a law that mandates all sectors to submit Forensic Accounting reports. The idea of enacting a law that compels companies to make such reports was embraced by the majority of respondents who also thought that the best way to introduce this system in a country with unclear business circumstances was through educational curricula through graduate programs. DIFA (Diploma in Investigative & Forensic Accounting) and CPA (Certified Public Accountant) are recommended as certifications that must be granted in corrupt countries as in the case of Lebanon.
Research Questions and Hypotheses
The discussion of research results is based on the research question investigated “To what extent can Forensic Accounting be applied? And how is it implemented?” To answer these questions, there is a need to identify whether such a scheme is known at any level and sector or whether it is being used or implemented as a procedure by a financially corrupt company or government agency.
The suggested hypotheses were analyzed and evaluated according to the findings.
Hypothesis 1: Countries with Opaque Business Practices Need Forensic Accounting as a Tool to Combat Fraud and Corruption.
This study reveals the desire to have Forensic Accounting in financially fraudulent countries because of the many acts of corruption committed and still without supervision and punishment because fraudsters always escape due to the absence of adequate and appropriate tools. to identify and locate these actions. With this there is an urgent need to introduce it in countries with unclear business practices and to create awareness about this procedure in various fields and sectors especially in finance and government sector.
This anti-fraud scheme is considered an appropriate tool to fight corruption because it has legal accessibility and necessary techniques to uncover fraud. An added point is the positive perception of it and the high acceptance of implementing it in financially opaque countries, with many incentives to use it in institutions or companies.
Hypothesis 2: Forensic Accounting Is Not A Common Practice Today.
The findings show that Forensic Accounting is well known in business opacity countries such as Lebanon, by practicing accountants, educators, and auditing & accounting firms. Although the results of surveys and interviews prove that this practice is known, it is not commonly used or practiced by audit firms because it is not often requested.
At the educational level, there is no emphasis on subjects in the education system. FA is not administered as a course or as part of a course in the university curriculum. In addition, there is no specific certification in this area like DIFA, but there are other well-known accounting certifications, such as CPA.
Therefore, what can be concluded is that there are no auditors or accountants who are experts in this anti-fraud field in countries where fraudulent business practices occur. These countries lack the skills that can be obtained from educational background and from experience gained from working in this field.
The government and legal sectors suffer from the absence of Forensic Accounting. As such, there are no regulations that enforce their use in solving financial problems or in evaluating financial statements, and there are no laws that distinguish forensic accountant testimony from other audit testimony. Forensic accountants in financially corrupt countries are not privileged on the level of credibility in court, they are not used as experts or references in court.
Hypothesis 3: Different Ways to Introduce Forensic Accounting in Countries with Opaque Business Practices
The respondents, as indicated by the results, were very positive in introducing Forensic Accounting in countries with unclear business practices and they suggested many ways to be executed effectively to provide good implementation of this new tool.
The suggested tools involve multiple solutions and target multiple sectors. It even targets psychological factors, which are developed by cultural and social aspects, and which can play a major role in bringing about changes to combat corruption and fraud in financially corrupt countries.
Results and Discussion
Major changes should be made to introduce Forensic Accounting in countries with unclear business practices. The change should target four basic elements that will contribute to creating a solid foundation and positive perception, the strategic plan includes:
I. Cultural & Sociological Change:
“There Must Be a Cultural Change in Society in Countries with Opaque Business Practices.”
The results of the in-depth interviews conducted showed that many respondents drew attention to the fact that the mentality of people in countries with opaque business practices should be changed in order to increase the acceptance rate and thereby increase the commitment in implementing Forensic Accounting. .
The participants emphasized the importance of changing the culture of financially distressed countries as they believed that asking someone to check their internal operations was a violation of their privacy. In addition, they do not trust someone outside the company or institution to come and check their finances.
Another problem with the mentality of people in countries with opaque business practices is that employees, managers or business owners feel they are being paid unfairly and are always being stolen by the government. Therefore, they believe that they have the right to steal back on the grounds that it is permissible to commit fraud.
The facts disclosed by the informants are also in accordance with the findings of previous research which shows that cultural and sociological factors provide a solid foundation for fraudulent activities, which creates an acceptance of corrupt acts which are considered as norms and justifiable practices in society in financially prosperous countries. corrupt (Brownsberger, 1983; Adra, 2006; PBB, 2001).
II. Education System Changes:
“Forensic Accounting Should Be Introduced in the Education Sector.”
Almost all respondents gave a high degree of importance to introducing Forensic Accounting in the education sector in financially corrupt countries. Almost all respondents believe that it should be taught in universities as courses or graduate majors or as case studies in courses
Respondents and interviewees also suggested introducing Forensic Accounting through workshops and seminars with the help of experts and skilled forensic accountants.
They also indicate acceptance for online education programs as DIFA is not available in most of the financially broken countries while DIFA is available in the US. Therefore online education can shorten the distance for people who are unable to leave work and are interested in specializing in this field.
The participants also recommended that employees and managers who are responsible for company finances should be educated and provided with intensive training to develop their skills so that they can detect fraudulent activities within the company.
I, I, I. Government System Changes:
“Forensic Accounting Should Be Introduced in the Government Sector.”
The National Integrity System Study, published by LTA in 2011, shows that corruption dominates all sectors and all branches of government that are financially corrupt. But to uncover corruption and fraud there must be tools or laws that can help pinpoint where this activity is taking place and legal avenues to ensure that these tools are effective.
Most of the participants in this study thought that it was important to introduce Forensic Accounting to the government sector where the latter should pay more attention and care about this subject, although they did not give importance to the role of government in the introduction process. .
They also recommended that the finance ministry launch an awareness campaign on this issue through the media, road panels and social media.
More importance was given to accounting syndicates, where participants believed that training sessions, workshops and seminars should be established to train skilled forensic accountants who could practice Forensic Accounting, if requested. The role of the syndicate is to spread awareness because it has power, knowledge, and interests.
IV. Legal System Changes:
“Forensic Accounting Should Be Introduced in the Legal Sector.”
Respondents believe that Forensic Accounting should be introduced in the legal system because the testimony of forensic accountants is recognized in courts in other countries.
LTA (2011) highlights the importance of ensuring that current laws are strong but of prosecuting even the president and ministers when acts of corruption are exposed. There should be a law that recognizes that it is a legislative tool to fight corruption.
Participants also emphasized the need to have judicial experts in this domain in the legal system as fraudsters can escape action because of the difficulty of revealing the manipulation, the associates, or the degree of involvement. in fraudulent activities. The interviewees also emphasized the importance of changing the law to ensure real punishment for fraudsters.
The need to track financial information and address unclear business practices is an urgent need. Financial crimes occur in various sectors in one country and are committed by different parties. Another important point pointed out in this study is that countries with opaque business practices tend to have similar characteristics that make them magnets for fraudulent activities such as money laundering, tax evasion/evasion, and related corruption jobs are the product of several regimes and state titles far away. . as a tax haven.
Unclear business nations tend to have secrecy laws, poor regulations, artificial taxes, lack of public accountability and poor corporate governance in countries like Luxembourg, Austria, Singapore, Switzerland, and many others which in return facilitate economic uncertainty. , instability, crime, the flight of capital and the breakdown of contracts of citizens around the world of course not to mention the damage to the social welfare of these countries. Fraud has its roots in various governments and companies especially in managerial positions such as CEO.
Financial crimes and fraudulent behavior are not new and citizens, although aware of the disadvantages of such practices, are not well informed about possible countermeasures to put an end to these practices. This in turn highlights the importance of forensic accounting as a means to stop fraudulent practices. However, its adoption and implementation is not an easy process that can happen immediately.
An understanding of techniques can assist forensic accountants in identifying fraudulent behavior. It is “the application of accounting knowledge and investigative skills to identify and resolve legal issues. It is the science of using accounting as a tool to identify and develop evidence of cash flows. These tools and techniques can be invaluable to fraud investigators and forensic accounting (Houck et al., 2006).
Houck (2006) also speaks of two main components, “litigation services that recognize the accountant’s role as expert consultants, and investigative services that use the skills of forensic accountants and may require courtroom testimony. According to the definition developed by the AICPA Forensic Services and Litigation Services Committee, “forensic accounting can involve the application of specialized skills in accounting, auditing, finance, quantitative methods, law, and research.
It also requires investigative skills to collect, analyze, and evaluate financial evidence, as well as the ability to interpret and communicate findings.” In other words, it covers various areas of litigation support, investigation, and dispute resolution and, as such, is the intersection between accounting , investigation, and law.
Fraud detection is a methodology and process for resolving various types of fraud from embezzlement to money laundering, disposition, obtaining evidence, writing reports, and testifying. Therefore, forensic accountants who can apply the process in a professional manner and are able to detect, investigate and thereby prevent fraud are needed.
However, the process of introduction and diffusion requires work at the macro level through culture and government and legislation (the main facilitator) and at the micro level through educational institutions and management. This is the work of the whole community.
Initially, the culture had to be changed to create a higher level of awareness about Forensic Accounting. As the results of quantitative research prove, people may be aware of it but they are not aware of the different practices, the diplomas required, or even the characteristics that make a person a qualified forensic accountant.
Qualitative research also guarantees quantitative research results regarding, but is not limited to the need to have laws requiring companies to submit Forensic Accounting reports. So the need to change culture implies acquiring new knowledge, hence changing values, norms, and practices.
This concept implies that if there is a change in the culture of financially corrupt and opaque business practices, it will result in changes in people’s practices, norms and values, as well as their behavior; In the end, awareness and knowledge will be created about fraud and how to combat it and the tools that can be used to prevent it.
The government must also strictly regulate and control financial practices and enact laws that mandate the submission of FA reports. It is worth mentioning that according to the results of both quantitative and qualitative research, interviewees tend to view government as the sector with the highest percentage of fraud. Educational institutions can have a major impact on the adoption and implementation process.
Interviewees viewed forensic accounting education as relevant and beneficial to accounting students, the business community, the accounting profession, and accounting programs. Not only limited to university programs, there are also special certificates related to this field, namely the Investigative & Forensic Accounting (DIFA) Diploma program. DIFA is designed to provide a broad range of knowledge and skills to conduct financial investigations.
Employee and management fraud, theft, embezzlement and other financial crimes are on the rise, therefore accounting and auditing personnel must have the training and skills to recognize these crimes. In addition, high-visibility corporate scandals, such as Enron and WorldCom, demonstrate the need to better prepare entry-level accounting graduates and practice CPA in the areas of fraud prevention, prevention, detection, investigation, and remediation (Houck et al., 2006).
Management should also implement their own internal controls and have good corporate governance in place to control fraudulent reporting. This, in addition to the law that requires filing a report to the government will definitely put an end to any fraud committed. For example, the terrorists of the September 11 attacks used the international banking system to fund their activities, transfer money, and hide their finances (Houck et al., 2006).
This highlights the need for investigators to understand how financial information can provide clues about future threats. Due to these fraudulent practices, public awareness of fraud and forensic accounting has emerged to highlight the need for financial professionals who demonstrate the training and skills necessary to perceive and act on any critical evidence that results from financial information.
The following summarizes the results of a survey conducted to reveal the age group of the Lebanese respondents, work experience, educational background, whether they have heard of it or not, and whether they consider it important in Lebanon as a business opacity country. Also summarized are what respondents considered to be the best way to introduce and apply Forensic Accounting in Lebanon.
Most of the respondents are Lebanese, aged between 18 and 30 years, hold a Master’s degree and work in Finance with 6 years and more experience. Most of the respondents also heard and read about forensic accounting but did not know whether Lebanese companies used it, however, agreed on the importance of using it in Lebanon which benefits all fields of work, especially financial institutions. They also agreed on the positive benefits of delivering a better future, positive impact on business, and safer business.
In addition, most respondents support the idea of having a law requiring all sectors to submit FA reports. It is important to mention that 75% of respondents who did not encourage this action work in finance.
In addition, educational programs are considered the best way to introduce Forensic Accounting (some have given roles to government efforts) believing in its ability to maintain its integrity, but not in all sectors. Respondents also agreed on the importance of DIFA certification and that the DIFA diploma should be included in Lebanese university programs. Finally, most respondents think the best way to obtain an FA is to outsource the audit firm that performs the service.
 Adra, J. (2006). Discussion About Corruption in Lebanon, personal communication.
 Brownsberger, W. N. (1983). Government Development and Corruption, Journal of Modern African Studies, 21, 215-233.
 Houck, M., Kranacher, M., Morris, B., Riley Jr., R., Robertson, J., & Wells, J. (2006). Forensic accounting as an investigative tool. CPA Journal. August 2006, Vol. 76 Issue 8, pp. 68-70. 3p,
 Lebanese Transparency Association (2009). Campaign Fund Monitoring from monitoring to reform.
 United Nations (2001). Report on the Assessment of Corruption in Lebanon. United Nations Center for International Crime Prevention.