The Need to Develop Forensic Accounting in Malaysia
Forensic accounting is seen as an important tool that will assist investigators not only to prosecute crimes such as bribery but also other criminal wrongdoings such as fraud, money laundering and other white collar crimes.
The rising white collar crimes can be seen from the cases handled by the Bukit Aman Commercial Crime Division. In 2001, the division received 10,578 cases with losses estimated at RM797.8 million and it was increased to 10, 857 with a loss of RM1.12 billion in 2002. In 2003, the division investigated 11,714 cases involving RM555.8 million in losses. As the commercial crimes are becoming sophisticated and organised, there is a need for the police to upgrade themselves with the latest knowledge to tackle such cases. It is important to note as well that the increasing white collar crimes need to be given special attention not only by the police but also other regulatory or authority bodies like the Inland Revenue Board (IRB) and Central Bank of Malaysia.
Forensic accounting has been in existence since ancient times but corporate scandals of late had given the profession rejuvenation. In Malaysia, forensic accounting is still in its infancy stage and most Malaysians seemed to assume that there is no difference between forensic accounting and auditing. From the study, it can be concluded that the slow progress of forensic accounting in Malaysia may be due to two main reasons. Firstly, forensic accounting is seen as an expensive service where only the big companies can afford it. Moreover, it will also be costly if the suspected wrongdoing is brought to court especially if it involve forensic accountant as an expert witness. Secondly, there no mandatory requirement for companies to conduct forensic accounting, even for distress companies. Also, there is need for a specific act or guidelines to govern and regulate forensic accounting practices in Malaysia. Another factor brought to light is the importance of the role of whistleblowers to expose wrongdoings within their organisations. However, the lack of protection for whistleblowers prevents people from coming forward to highlight illegal or unethical acts by companies. Most of the respondents believe that new legislation to protect whistleblowers from retaliation will, help create an open environment where individuals can raise concerns without fear of recrimination.