Law enforcement and auditors' roles, responses, and complicated relationships in accounting fraud?

Abstract

Financial statement falsification or fraud that directly affects financial statements. The most extreme financial statement manipulation is accounting fraud. Beyond financial losses, fraud affects employees, industry, the environment, and society (International Public Sector Fraud Forum, 2020). Fraud causes corporate bankruptcy, reducing family income. Fraud distorts markets by giving fraudulent companies an advantage over legal ones. Accounting fraud can cause controversies that impact society and stakeholders. Regulators, practitioners, and researchers prioritize preventing these potentially dangerous events. Corporate activity monitoring has improved, but severe accounting fraud remains in ostensibly robust and diverse institutional environments. Accounting literature on auditor-law enforcement fraud coordination is examined in this study. This literature review uses a mixed methods research synthesis to analyze accounting journal articles from 2014 to 2024 using keywords like "Auditors," "Enforcement," "Accounting fraud," "responses," and "complicated relationships." Auditor and law enforcement roles, leading fraud indicators, and stages will be studied. Use Publish or Perish (PoP) and SLR 7P to collect data from SINTA, SEMANTIC Scholar, and Google Scholar. The investigations show the range of fraud terminologies and concepts, quantitative measurement discrepancy, and shallow fraud analysis. This study suggests more law enforcement-auditor case studies. This work will inform fraud accounting research. This paper underlines the need for academic, political, and practitioner cooperation to limit fraud's economic and social harms in a complex and interrelated system. This study examines how the accounting literature addresses law enforcement-auditor relationships in accounting fraud rather than monitoring systems or broad fraud discussions. Law enforcement actions have a significant impact on auditor-client relationships and information disclosure. Customers' perceptions of auditor quality and risks will be examined in the essay.