The Chronicles of Forensic Accounting Term

Posted on August 11th, 2010

Have you heard of Forensic accounting before? You might think that it is something related with autopsy or investigation of the police to the victim of murders. It is actually not really far from it, the difference is Forensic Accounting works for financial fraudulent investigation in business world. Actually, this job came from the age of ancient Egyptians when the king of Pharaoh had written documents of his accounts regarding of his treasure of gold and other assets.
Having a lot of treasures, it was very risky for Pharaoh to be ‘cheated’ by irresponsible intelligent people to overtake his wealth through scribe documents of his account. Therefore, he needed people to do forensic accounting. The job was actually pretty much the same as what forensic accounting does nowadays. The Egyptians or Pharaoh’s people kept the newest accounting standard and procedures updated. They also provided recommendations for internal control of the treasures. It was actually pretty the same as what is happening recently. The difference is only probably the tools and how the forensic accountants run the investigation. Long time ago, they were not banks or finance departments, but now forensic accountants need the evidence or statements of the related bank or financial institution.
The Egyptians maybe did not know that the job of financial fraudulent investigation is called forensic accounting, because the term had not been found yet, not until recently. Even in 1824, when a Scottish accountant advertised his legal accounting expertise, the term had not been coined yet. The term was finally credited by Maurice Peloubet for his essay’s title in 1946, called “Forensic Accounting: Its Place in Today’s Economy”.