A Forensic Auditor is appointed to analyze, interpret, summarize and present complex financial and business-related issues in a manner that is both understandable and properly supported.

Forensic Auditors can be engaged in Practice or employed by Insurance companies, banks, police forces, government agencies and other organizations.

The Role of Company Secretary as a Forensic Auditor may be understood as follow:-

  1. Criminal Investigations: – A Company Secretary would use his/her investigative accounting and Legal skills to examine the documentary and other available evidence to give his/her expert opinion on the matter. Their services could also be required by Government departments, the Revenue Commissioners, the Fire Brigade, etc. for investigative purposes. Practicing forensic accountants could be called upon by the police to assist them in criminal investigations which could either relate to individuals or corporate bodies.
  2. Personal Injury Claims:- Where losses arise as a result of personal injury, insurance companies sometimes seek expert opinion from a forensic auditors before deciding whether the claim is valid and how much to pay.
  3. Fraud Investigations:- A Company Secretary might be called upon to assist in business investigations which could involve funds tracing, asset identification and recovery, forensic intelligence gathering and due diligence review.

In cases involving fraud perpetrated by an employee, the forensic auditors will be required to give his/her expert opinion about the nature and extent of fraud and the likely individual or group of individuals who have committed the crime. The forensic expert undertakes a detailed review of the available documentary evidence and forms his/ her opinion based on the information gleaned during the course of that review.

  1. Investigation and Inspection:- Company Secretary may help the Police, and other investigating authorities in collecting evidences and other investigation purposes. For example, section 157 Cr.P.C, 1973; sections 17 and, 18 of the Prevention of Corruption Act, 1988; Section 6 of The Bankers Books Evidence Act, 1891; Section 78 of Information Technology Act, 2000; Section 447 of the Companies Act, 2013 wherein the Court or Police may require the skills of Forensic auditors while inspecting any books in so far as related to the accounts of an accused.
  2. Expert Opinion:- Company Secretaries see and carefully examine the accounts and balance sheets and use his skills to find out whether there is any fraud committed or any anomaly associated with it by giving his expert opinion. This finds place in for example section 45, section 118 of Indian Evidence Act, 1872; section293 of Cr. P.C, 1973.
  3. Professional Negligence:-The forensic auditor might be approached in a professional negligence matter to investigate whether professional negligence has taken place and to quantify the loss which has resulted from the negligence.

A matter such as this could arise between any professional and their client. The professional might be an accountant, a lawyer, company secretary etc. The forensic expert uses his/her investigative skills to provide the services required for this assignment.

  1. Expert Witness Cases:- Company Secretary as Forensic Auditor often attend court to testify in civil and criminal court hearings, as expert witnesses. In such cases, they attend to present investigative evidence to the court so as to assist the presiding judge in deciding the outcome of the case.
  2. Meditation and Arbitration:- Some forensic auditors because of their specialist training they would have received in legal mediation and arbitration, have extended their forensic auditing practices to include providing Alternative Dispute Resolution (ADR) services, in absence of which a matter could be expensive and time consuming for individuals or businesses involved in commercial disputes with a third party.
  3. Litigation Consultancy:- Company Secretaries are eligible to be engaged in litigation and assisting with evidence, strategy and case preparation. Computer Forensics: Assisting in electronic data recovery and enforcement of IP rights etc. 46 PP-FA
  4. Computer Forensics:- A Company Secretary is trained in assist in electronic data recovery and enforcement of IP rights etc.

Power and Duties of Auditors and Accounting Standards:- Role of Company Secretary in Mitigating the Corporate Frauds.

The financial/ corporate frauds and scams which have taken place in India, required the attention of the Law makers.

 It was high time to evaluate the high standards in corporate governance and implement stringent provisions to tackle corporate Fraud.

The problem was on the rise both in its frequency and severity. The increasing rate of white-collar crimes demanded stiff penalties, exemplary punishments and effective enforcement of law with the right spirit.

Examples: Our country has witnessed several corporate Frauds, till date e.g. Rs. 5,000 crore Harshad Mehta scam in 1992, Rs. 7,000 crore Satyam fiasco in 2009, the Rs. 27,000 crore Sahara fraud case which started in 2010 and was tacked strictly by the Supreme Court of the country.

Therefore, the government via Companies Act, 2013 has introduced the definition of fraud for the corporates and also settled down provisions of the regulatory authority and professionals to take measures against the corporate frauds in the country.

Value Driven Services by Practicing Company Secretary:-

1-Financial Markets

2-Audit:- Internal Audit ,Secretarial Audit and Forensic Audit

3-Companies Act 2013

4-Corporate Governance

5-Pleadings and Appearances Before Courts and Tribunals

6-Risk and Compliance Management

7-Taxation:- Income Tax and GST

8-Due Diligence and Reporting