FINDINGS
The Development of Forensic Accounting in Malaysia
Based on the interviews, it was found that all respondents were of the opinion that forensic accounting in Malaysia is still in its infancy stage as compared to the developed countries. According to one of the respondents, there seemed to be some misconceptions of forensic accounting among Malaysians that need to be clarified. Most of them assumed that forensic accounting and auditing are the same whereas these two accounting disciplines are different in terms of their objectives and requirements. Auditing is the persistent process engaged by the company to give an opinion on the true and fair view of the financial statements. On the other hand, forensic accounting is aimed at detecting any fraud or irregularities that happen in the company and is carried out on demand by the company. According to the respondents, there are few factors that may affect the current level of forensic accounting development in Malaysia.
Firstly, forensic accounting is seen as an expensive service that only big companies can afford it to detect any irregularities or fraud in their companies. Besides, it will be quite costly if the issues were brought to court and where it involve forensic accountant as an expert witness. Thus, most companies prefer to settle the issue outside the court to avoid the expensive cost and the risk of bad publicity on their corporate image. Secondly, there is no mandatory requirement set by the regulatory authorities on the companies to conduct forensic accounting, even for distress companies. To date there is no specific act or guidelines on forensic accounting practices in Malaysia. On this matter, some of the respondents suggested that Malaysia should have a specific act to govern forensic accountants. They believe that the act will not only govern the forensic accountant but also create awareness to the victims and society as a whole.
The respondents also view that money laundering activity is not significant in Malaysia as the cases detected were small. Furthermore, the system already in place by the Central Bank is considered complete and able to detect any money laundering transaction.
Nonetheless, the role of whistleblower is important to divulge the corruption in the organisation. Moreover, forensic accountant needs cooperation from the whistleblower to clarify certain issues. Malaysia's Prime Minister Datuk Seri Abdullah Ahmad Badawi who has frequently asked the public to help in the fight against graft, believed that corruption can only be fought if many people are charged in court but before punitive action can be taken, wrongdoings must be reported and properly investigated (The Star, June 24, 2006). However, the fact is few people will blow the whistle if they believe that by doing so will put them in a spot.
According to the respondents, the lack of whistleblower protection might be a factor that dissuades people from coming forward to highlight illegal or unethical acts within their organisations. Even though there are efforts taken by Securities Commission (SC) and Central Bank of Malaysia to encourage internal and external whistleblowers to disclose wrongdoings, most of the respondents opine that there is still no laws enacted to protect whistleblowers against retaliation. They believe new legislation will help to create open working environments where individuals can raise concerns without fear of recrimination.
Skills and Minimum Requirements needed by Forensic Accountant
As regards to the skills needed by forensic accountant, all the respondents are of the same opinion that working experience is a crucial factor in determining whether a person can become a forensic accountant in Malaysia. In terms of the number of years of working experience needed to be a good forensic accountant, most of the respondents view that a minimum working experience of 3 years is required. However, all the respondents agreed that fresh graduates are not suitable to be recruited as a forensic accountant. Since a forensic accounting team may consist of lawyers, accountants, computer forensic experts and law enforcers like police and customs officers, the name 'forensic accountant' therefore is not necessarily applicable only to a person who holds an accounting degree. Even so, it is advisable to have experience in external audit and internal audit before one becomes a forensic accountant.
In addition, one should have some basic knowledge on psychology to assist in interrogation of the suspect or witness process. While to be a computer forensic expert, one should have strong information technology background particularly when rapid technological changes are common in today business environment. Besides those criteria, other skills that seems important to be a forensic accountant like knowledge of relevant laws and legal system, communication and interpersonal skills to deal with clients, analytical skills and critical mind, common and logic sense relating to criminal behaviours, interviewing and interrogation skills in identifying potential suspects.
In Malaysia so far, only the MARA University of Technology has offered the Master in Forensic Accounting and Financial Criminology. The programme is embarked in collaboration with the Anti-Corruption Agency of Malaysia (ACA) as an effort to develop expertise in forensic accounting in Malaysia. Other universities either introduce the forensic accounting subject as an elective course or incorporated as a part of syllabus in accounting or auditing course. The professional bodies in Malaysia have yet to introduce a paper in forensic accounting. The forensic accounting practitioners normally become a Certified Fraud Examiner, an accreditation given by Association of Certified Fraud Examiners in United States.
Future Prospect of Forensic Accounting in Malaysia
Currently, the main government agency to fight corruption in Malaysia is the Anti-Corruption Agency of Malaysia (ACA). Another important government agency that involved directly in combating white-collar crimes is the police. It was reported that the Bukit Aman Commercial Crime Division will train more police officers in forensic accounting to handle rising white collar crimes (The Star, November 30, 2004). Further, the Prime Minister of Malaysia, Datuk Seri Abdullah Ahmad Badawi in his keynote address during the 4th ADB/OECD Anti- Corruption Initiative for Asia Pacific Conference on 5 December 2003 has emphasized that Malaysia would put a place a National Integrity System to fight corruption. In private sector, the KPMG was the pioneer in the accounting field that established the forensic accounting department in the firm.
According to the respondents, there are good prospects for forensic accounting career in Malaysia. Globalisation, increase of foreign direct investment (FDI) and rapid development in technology are among the factors that will contribute to the demand for forensic accountants. Businesses have become more complex and thus any irregularities or fraud in the transactions is hard to detect by ordinary staff. As a consequence, the auditing processes either by external or internal is insufficient. One should understand that the audit is based on the samples selected and the responsibility of auditor is to express the true and fair view of financial statements. It is important in today's business environment to issue a transparent financial report in order to convince and regain the trust of investors. Thus, forensic accounting is seen as a suitable tool to offer the highest level of assurance and to add credibility to the financial statements.
