A Study on Fraud Prevention and Detection Methods in Sri Lanka

Abstract

Forensic accounting is emerging area in countries like Sri Lanka even though it came up many years ago. Corporate frauds have been increasing worldwide, emphasizing the needfulness of forensic accounting and it has become a great opportunity for accountants and other professionals to think beyond the traditional framework. This study examines the perception of accounting professionals regarding the occupational fraud prevention and detection methods and software used in Sri Lanka. The survey was conducted using hundred accounting professionals of Sri Lanka. The results reveal that password protection, external audits, bank reconciliations and internal control review are quite common in use while bank reconciliation, cash review and password protection are also highly employed methods to detect occupational frauds. However, fraud hotline, forensic auditing and forensic accountants are identified as the least used methods. Further, filtering software, virus protection and firewalls could be identified as the commonly used fraud prevention and detection software used in Sri Lankan context. Implementation of effective fraud preventing and detecting methods, software is highly recommended on preventing and detecting corporate frauds in Sri Lanka.