The Research On The Misuse Of Auditing Theories In Forensic Accounting

With the deepening of economic reform, China has developed at a high speed. The increasingly complicated economic behavior and the game among the vested group make financial personnel or judicial officer solve the special financial and accounting problems more and more difficult. At the same time, we desperately need to rely on the scientific activity, which is the basis of accounting, audit and legal theory and the comprehensive application of specialized techniques ——Forensic Accounting. It is the product of diversified economy, which is under rule of law and playing an important role in litigation related to financial issues. However, due to the late start, the development of forensic accounting in China is insufficient, especially in the scope of activities, the procedure, the technical methods and the subject of forensic accounting. These disadvantages not only affect the work forensic accounting perform, but also lead to many forensic accounting personnel make excessive reference to audit in practice, which has many similarities to forensic accounting. Even appeared audit report instead of forensic accounting expert opinion. Forensic accounting is a comprehensive activity which is combined legal, accounting and audit. The study and research on forensic accounting is closely to related disciplines, in particicular,forensic accounting has many similaritise with audit, which also views financial information as main object and performs economic oversight functions. However, both in the subject, the implementation process and the work, forensic and audit have significant difference in practice. It can be said that the forensic accounting is a legal activity independent of audit. The misuse of auditing theories in forensic accounting not only affect the judgment of judge and the admissibility of forensic accounting expert opinion, it also may have negative consequences for lawsuit. Further it will influence the legal process of forensic accounting in our country. Now it is one of the most important problems encountered in the development of forensic accounting.Therefore, in order to solve the problem of misuse of auditing theory in forensic accounting, this paper will compare forensic accounting and audit from theory and practice,then points out the connection and difference of them, and to recommend appropriate solutions. This paper is divided into five chapters. The first chapter introduces the definition of forensic accounting. On the one hand,it fully introduces the background of the development of forensic accounting in China, as well as the comparing between “forensic accounting” and “judicial accounting”. On the other hand, it also introduces the theoretical basis of forensic accounting, accounting principles and legal principles. The accounting principles are the link between forensic and audit, which make them have many similarities to each other. The legal principles is the key factor that make the two have essential differences. Related concepts are introduced and discriminated, It works to deeply understand the characteristics and essential attribute of them. In the second chapter, forensic accounting and audit are compared further. For the same points, methods by using contrasting analysis to analyze from five specific aspects, namely the independence of the subject, passive activity, consistency test object, the same consideration and have risk as presenting results. For the different points, mainly deeply analyze from nature, subject, implementation process and results. Cited the same points, indicating to a certain extent, forensic accounting can learn from audit, which both theory and practice have been maturely developed. Cited the different points,raise the key problem in this essay, forensic accounting is an independent activity from audit, the two can not be replaced each other, and can not take it for granted misuse audit in practice. The third chapter combines the specific judicial cases, setting forth the circumstance that forensic accounting is too dependent on audit, mainly in the range of activities(forensic accounting infer legal issues, or mental activity inferred),methods aspects(forensic accounting uses non-technical means which is prohibited, as well as making wrong choice between “single count” and “grand total”),implementation procedures(procedures inverted and the unique program for forensic accounting neglected),evidence rules(misuse of “reference evidence” and “supporting evidence”, combined with the “Tu Jingxin” case),identification opinions. Then the forth chapter analysis the consequences of excessive use on auditing and discusses the possible causes, combined with the second chapter. The excessive reference is an important problem in the practice, which needs to be addressed urgently. The fifth chapter puts forward several perfect responses for the actual situation of China based on the analysis between forensic accounting and audit, namely building the law and regulation of forensic accounting, strengthen the judicial training of accounting staff of legal knowledge, and build industry associations to strengthen the supervision and guidance. Hope these measures do work and really solve the excessive use of audit and eliminate the adverse effects in litigation, further promote the standardization process of legalization. The sixth chapter is the summary of this paper, pointing out the innovation and weaknesses and looking forward to the follow-up research.