The Comparative Study On Forensic Accounting Service Between China And America

Forensic accounting service, with the requirement for information’s transparency, brought into public and conducted from the merging of economical marketing. Also it servers the lawsuit involving the misconducting of financial report and fraud. Namely, it can be explained not only as the product of the times in economic market economy, but also the support medium of legal procedures. This paper will divide the forensic accounting service into Judicial Accounting Identification and Forensic accounting consulting by the activities’ result. If the professionals create an identification report for clients, we call this kind of service Judicial Accounting Identification and vice versa. The former is mainly to provide the experts’ advice for legal purpose as an evidence for cases; the latter one is almost to offer fraud investigation, fraud Risk Management, fraud Prevention, legal supports and so on.This paper will be parted into a few parts to introduce the forensic accounting service in China and America, analysis the reasons why there are such differences and inspire and advise the better system set-up. Also the basic logic for this paper is that finding problem AND analyzing problems is for solving problems. The first chapter will redefine the intension and extension for Forensic accounting service. The other main function of this chapter focused on the research papers in this countries and give the definition of its target for study. By taking examples of the theories of Judicial Accounting Identification and Forensic Accounting in China, comparing with American, it clarified their similarities and differences. Following the standard prescribed in the first chapter, the next two chapters will analyze in two ways- Judicial Accounting Identification and Forensic Accounting Consulting. Then the second chapter mainly contrasted the current principles in China with that in America on three aspects: The legal status of experts, initialization process and activities’ nature. In the other side, the third chapter spread the comparison of forensic accounting consulting services in other three respects: qualifications for practice, the range of consulting service and the regulation for those services. The forth chapter is to explicate the reasons for those distinctions. Firstly the accounting standards would influent the original materials for forensic accountings’ references. Resulting from convergence of international accounting standards, this factor impact would drop. Secondly, in a comparative law’s view, this part will take the different legal background into consideration to explain the reasons. Lastly, since the professionals of this field are scarce, it would affect the field-working and technical judgment for cases. As a conclusion, the last chapter listed the results of this comparison and also discuss the suitability for setting up a forensic accounting association and an organization like PACOB in China.