Application of Forensic Tools to Detect Fraud: The Case of Toshiba
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There are various methods for detecting fraudulent financial statements. This study selected three models. Briefly, identify and explain these models Document Preview:

Journal of Forensic and Investigative Accounting Volume 9: Issue 1, January–June, 2017 Application of Forensic Tools to Detect Fraud: The Case of Toshiba *Anupam Mehta Ganga Bhavani Introduction References to fraudulent financial statements (FFS) have increased in frequency in the last several years. FFS primarily consists of manipulating elements by overstating assets, sales and profit or by understating liabilities, expense or losses (Charalambos T., 2002). “The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud”-SAA 99 and SAS 113. However, during the past several years, financial and accounting fraud has appeared in the headlines of mainstream news worldwide. Although accounting fraud is not a new phenomenon, recent cases involve much larger sums than previously (Clements, 2016). The present study tests the effectiveness of three popular forensic tools in detecting FFS by Toshiba Corporation from 2008?2014. The three tools are the Beneish Model, the Altman Z-Score and Benford’s Law. The comparison of the results and discussion of the tools’ relative effectiveness provide direction for investigators about the selected tools’ effectiveness for detecting FFS. Every tool has its advantages and limitations. By using only one forensic tool to detect fraud, an auditor cannot adequately judge the financial statements of any corporation. This study highlights the weaknesses of the selected forensic tools as well as their areas of application. Thorough application of these tools to Toshiba’s financial statements revealed that the three tools did not give the same results. In addition, it was not possible to use them with the same input. The present study’s focus was to detect fraud in the financial statements of Toshiba Corporation of Japan during seven years, from 2008?2014, as…



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