Forensic Investigations: 3 Shocking Cases & Vigorous Techniques

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Sarang Khatavkar
Sarang Khatavkar
Sarang is one of the first forensic accountants in the country who worked extensively with the law enforcement agencies across the country to solve the fraud problems. He is a Certified Anti Money Laundering Expert. He worked in the shipping industry before joining Riskpro and is instrumental in exposing the Trade based money laundering cases for the banking sector. He investigated numerous Ponzi Schemes for the Government of Maharashtra and presented in the court of laws as the expert witness to justify the findings of the reports.

Forensic accounting investigations are like detectives in the financial world. They play a vital role in uncovering financial crimes, such as theft or hiding money. These investigations help find and get back stolen or misused money. In this article, we’ll see how forensic accountants investigate financial crimes and the methods they use to find evidence.

What are Forensic Investigations?

Forensic investigations are like scientific detective work. Experts analyze evidence to solve crimes, settle legal disputes, and present evidence in court. They collect, study, and interpret physical and digital evidence found at crime scenes. Forensic accountants are specially trained to investigate financial crimes like fraud, embezzlement, and money laundering. They play a crucial role in uncovering the truth and bringing justice to those involved in such illegal activities.

Generally, in India, Certified Forensic Accounting Professionals (CFAPs) carry out forensic investigations. Training for Certified Forensic Accounting Professionals (CFAPs) focuses on honing their abilities to identify suspicious patterns and discrepancies in financial documents and transactions. These signs can be indicative of potential criminal activities.

Techniques of Forensic Investigations

They use a variety of techniques to gather evidence and build a case. Some of these techniques include:

  • Financial statement analysis: Financial statement analysis is like investigating a puzzle in numbers. Forensic accountants, who are like financial detectives, carefully look at financial papers to find any mistakes, differences, or strange things that could mean someone is doing something wrong, like cheating or doing something illegal. It’s a bit like catching a thief who leaves clues behind in the numbers.
  • Asset tracing is like following a money trail. Forensic accountants use their skills to track how money moves through complicated transactions to find out where the money originally came from. It’s like being a financial detective to figure out the source of the money.
  • Computer forensics is like detective work for computers. Imagine someone using special tools and methods to find hidden information on electronic devices, like laptops or phones. They look for clues in the digital world to figure out if someone did something wrong. It’s kind of like searching for fingerprints on a computer instead of at a crime scene. These experts use special computer programs to uncover data and check if it can be used as proof in a case.
  • Interviewing witnesses: Forensic accountants talk to people who might know about the fraud. They do this to learn more about what happened and to put together evidence for their case.
  • Document analysis: Experts like forensic accountants look at papers like contracts, bills, and bank papers. They do this to find proof of cheating or other bad money activities.

Forensic Investigations in Action

Forensic investigations can be quite complicated and take a lot of time. They often involve dealing with large amounts of financial data and using special tools and methods. Let’s see some real-life examples of how forensic accounting investigations work.

In India, forensic accounting investigations are becoming more frequent because businesses and individuals are facing more attention from regulatory authorities, creditors, and other interested parties.

Satyam Fraud

One of the most well-known cases of forensic accounting investigations in India is the Satyam Computer Services scandal, exposed in 2009. Satyam, a major IT company in India, falsely inflated its revenue and profits by over $1 billion over several years.

This scandal resulted in the arrest and conviction of several top executives, including the company’s founder and chairman, Ramalinga Raju. Forensic accountants played a crucial part in uncovering fraud by carefully examining financial records and transactions to spot irregularities and discrepancies.


Forensic accounting played a significant role in the investigation of the National Spot Exchange Limited (NSEL) scam. Fraudulent activities by the commodities exchange resulted in the loss of more than Rs 5,500 crore in 2013. Forensic accountants also conducted investigations of financial records. They found transactions as evidence of wrongdoing. The investigation resulted in the arrest of several individuals involved in the scam, including the exchange’s founder and several top executives.

PNB Fraud

Forensic accountants have used their skills and expertise in India to uncover fraud in the banking sector. In 2018, the Punjab National Bank (PNB) became embroiled in a massive fraud case. Rogue insiders used fraudulent letters of undertaking (LoUs) to obtain loans from other banks. The fraud caused the bank to lose more than Rs 14,000 crore. As a result, many people, including top bank officials, were arrested. Forensic accountants played a vital role in finding the fraud. They looked at financial records and transactions to find any mistakes or unusual things.

Moreover, forensic accounting investigations are not limited to the corporate sector in India. CFAPs are also involved in investigating cases of tax evasion. They also work with law enforcement agencies and regulatory bodies to uncover fraudulent activities and financial crimes.

In simple terms, these investigations involve looking at financial documents, finding transactions that seem suspicious, and following the path of money. With their knowledge of forensic accounting, these experts help catch financial criminals and stop similar crimes from occurring again.

In a famous case, the Income Tax Department of India used forensic accounting techniques to uncover a tax evasion scheme involving a well-known builder. During the investigation, they found that some cash transactions were not properly recorded in the builder’s financial records. As a result, the builder was penalized heavily under Income Tax Laws. This case shows how forensic accounting techniques can be essential in revealing fraud and ensuring fairness for those affected.

CAG’s Role in Forensic Investigation

The Comptroller and Auditor General (CAG) of India is a significant auditing authority in the country. They have been actively involved in conducting forensic accounting investigations in the public sector. In 2020, they conducted a special audit of the Delhi Jal Board. Their investigation revealed many cases of irregularities and mismanagement of funds. The audit report also found instances of not following financial rules and procedures, as well as instances of paying more than required and irregularities in the procurement process. CAG’s efforts have helped uncover financial issues and promote transparency in public sector organizations.

In conclusion, forensic accounting investigations are playing an increasingly important role in India’s fight against financial crime. From corporate fraud to tax evasion and money laundering, forensic accountants are not only using their skills and expertise to uncover evidence of wrongdoing but also to bring perpetrators to justice.
As businesses face greater scrutiny, the demand for CFAPs is likely to grow in India and around the world.
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