Loss Quantification Research Of Forensic Accounting

Loss quantification of Forensic accounting is a newly established research domain.It is a bottleneck in resolving the loss related civil cases and a bridge connecting multi-disciplinary knowledge such as Accounting,Auding,Law etc.In recent years, as the market economy develops, the complexity of the content of economic activities and hence leading to fraud and legal support have been made traditional occupational groups hardly to deal with. Many cases of civil disputes through a long legal process remains unresolved, in which a very important reason is that the loss can not be reliably measured or the loss quantification results can not be accepted by the judges. In this case, contradictions between the needs of loss quantification of Forensic accounting and loss measurement lacking of theoretical research have becoming increasingly prominent. This situation requires a multi-disciplinary knowledge group in forensic accounting appears to enhance the loss of measurement theory and apply it into practice. The accounting, auditing and legal multi-disciplinary knowledge of forensic staffs provide a possible solution to this problem. Therefore, the loss of forensic accounting effectively measured and providing litigation support for the court will make trial of cases more efficient and damages also more convincing.Judging from the study at home and abroad, the loss quantification of Forensic accounting research literatures are rare. Domestic books research it as a small problem and theoretical study lacks of cases and practical experience. Even "Forensic Accounting" which is walking in the forefront of forensic accounting research involving articles about the loss quantification are also few. According to the author, from the date of "Forensic Accounting" has been founded to 2007, a total of 132 articles have been published, among which loss quantification articles are only three, representing 2.27% of them. Nevertheless, this article is drawing on the basis of the existing literature, combined with practical, integrated multi-disciplinary knowledge and personal understanding. Specifically, this paper is divided into four parts, as follows:The first part is introductory. Daqing friendship civil case led to this article'background and the study from the status quo at home and abroad led to the meaning of this article. If a theoretical study of the problem is relatively mature and we afe still to conduct its research, there is no much meaning. But this paper is written lacking of research in theoretical formulation. In research ideas, this article follows the progressive approach. It starts theoretical studies, and then combines with a specific case to explain the loss quantification theory on the application, finally, revisits the theoretical part-the loss quantification results for the trial to provide litigation support. In this paper, the author uses systems approach, matter law and case-based research methods. From the theory, examples and then to theory, it forms an orderly, complete structure, which is a system in itself. This paper is constructed complete information system of loss quantification of Forensic accounting. A combination of theory and case reflects that loss is how to be counted involving civil cases. In addition, the case analysis method. Through the loss of specific cases is confirmed and measured, we can see clearly the process of quantification, which confirms the loss of the use of measurement theory and practice of operation.The second part is the basic theoretical research on loss quantification. It includes the loss quantification concept, assumptions, functions, principles, objectives and basic theory. Defining the loss quantification concep is very important. Only by first clearly understand and grasp concepts, can we follow-up study on the subject. Loss measurement of basic assumptions includes economic crimes leaving the traces assumptions, the performance of hypothetical symptoms, the loss compensation assumptions. Lacking any of the above assumptions, loss can not be rightly counted. Loss quantification function is best embodies the characteristics of Forensic accounting. Loss measurement principle is objectivity, independence, legitimacy and baseline principles. Loss of measurable goals are to provide services and evidence for violations and disputes handling. The basic measurement theory is mainly from accounting, auditing and legal basis.The third part is the focus of this article. Major topics are the loss measurement procedures, methods and their applications. There are no fixed procedures for loss quantification. Generally, first of all, we should understand the background of the case so that confirms loss-related legal problems. Secondly, investigate and analyze problems and then develop plans. Thirdly, choose measurement methods. Fourthly, measure the loss. Finally, issue the report of the loss measurement. The loss measurement report is the final product in the proceedings. It is likely to become trial evidence. The correct, legitimate loss measurement report is very important and even decides the success or failure of the proceedings. Loss measurement method selection is the key to the loss measurement factors. The calculated results of the same case using different measurement methods may differ.Different measurement methods have the different degree of social identity. In general, measurement methods which have a high degree of social identity are authoritative and easily adopted by the judge. This article describes the loss measurement methods in the specific areas, bacause different measurement methods is applicable to different fields. The author mainly researches fishery losses computing because of water pollution incidents, enterprise economic loss computing because of accidents, forest fire economic loss calculations and the calculation of stock market losses because of false statements. These areas play an important role in the national economy. As long as we grasp how to calculate the losses in these areas, it is of great significance. The author only shows the general models in study of these loss quantifications related to the fields above, then explains and simply evaluates them. Finally, in consideration of it trigering off a geometric upward trend in recent years, therefore, stock market false statements in civil cases were selected to explain how relevant theories and methods of measuring to be used in practice. This case involves the application of the loss measurement preparation, the choice of measurement methods, measurement process and how to issue the report. As long as understand this case, we can also comprehend others.The fourth part is the end-result of this article. It points out that the result of loss quantification is to provide litigation support involving settlement of civil disputes. If the result of loss quantification failed to provide litigation support for the court, all the work we have done is meaningless. I would firstly study the basic requirements of loss quantification in the litigation support, and then its identity and power as evidence. Only with the loss measurement subject having the main expert witness qualifications, maintaining independence in the measurement process, using accepted scientific methods, issuing the written report which meets revelant requirements, the result of measurement may have been recognized. At the same time, as evidence, the loss measurement result should have the general characteristics such as the objectivity, relevance and legitimacy. In addition to those, it also has indirect and professionalism as its own characteristics. The trial process, that is, all aspects of loss measurement should be challenged and demonstrated. Provided that the process and procedure of loss quantification meet the requirements physically, have withstood cross-examination of the parties, it is possible to be adopted by the judge. In view of this, the detriment of parties can be duly punished and the injured parties are entitled to be compensation. Finally, this section discusses the judicial expert of China's hybrid model. In light of China's actual conditions, the author advises relervant administrations establish our own judicial model.The key innovation of this paper is:try to explore the basis of evidence law of loss quantification in Forensic accounting. A case of false statements describes how the loss measures contact practice, which is from China's securities market and the existing data do not have.Shortcomings of this paper:Firstly, this study is shallow and even some respects have not been studied, due to loss quantification of forensic accounting involving a number of disciplines of knowledge while limitation of the writer's discipline level, knowledge and capacity; Secondly, owing to loss quantification is an emerging research direction, although there is a strong demand for its practice, the theory is relatively few. There are a few literatures and ways to access to documentation at home and abroad. The relevant information about "Journal of forensic accounting" is from the journal's Web site and the first-hand information on the paper is still not available; Finally, although the high demand on loss quantification, the successful application of the loss quaritifiantion theories and methods to solve problems are very few. In addition, the complete loss quantification reports are few. The writer'limited working experience result in too few cases in this article.