Analysis of the Necessity to Develop the Forensic Accounting in China
Starting from the concept of the forensic accounting, by the discussions about the spreading false accounting information, the limitation of the laws and accounting, the deficiencies in the traditional auditing, and imperfect institution of the forensic accounting organization, the necessity to develop the forensic accounting in china is explained in this article. China is in the term of economic transformation, and with the quick development of the economy and the continual enhancement of the comprehensive national strength, the accounting information is more and more important in the whole social and economic activity, and the amount of the civil action induced by the accounting information is increasing by the geometric series, which will all quicken the further integration of the legal domain and the accounting domain, and generate a new accounting domain, i.e. the forensic accounting. The forensic accounting is the new accounting domain which was born in the west country of 1980s to adapt the development of the market economy and the perfection of the legal system. It is entrusted by the independent third party, and adopts certain procedures and methods to survey, compute, and analyze the management and financial items, and the part of economic loss, or the legal issues in the management in the conflict of economic benefit by the professional knowledge, and forms the forensic accounting report, and provides references for the court or the arbitration agency or the administration authority, and reduce or confirm legal responsibilities, or offers management advices. The forensic accounting is pushed by the development of the economic environment, and generated when the occupation change and the specialty development encounter bottleneck. Aiming at the actuality of China, following aspects can be considered to review the necessity of developing the forensic accounting. 1. The spreading false accounting information is the most essential cause to generate the forensic accounting Because of the false accounting information, the society and the economy suffers large loss, and the survival and development of the accounting industry is largely impacted, and investors' benefits are largely damaged, and the social public would largely doubt the social economic order. When the harm of the false accounting information develops to some extent, the lawsuit aiming at the false accounting information will occur, and it would make the accounting knowledge and the legal knowledge to be collided, and many situations which can not integrate completely would occur, and single accounting knowledge or single legal knowledge could not solve problems effectively. At present, China is in the term of economic transformation, and the amount of economic crime case and the sum of corruption increases obviously, and the embezzlement modes are more and more complex. When the court judges these cases, following issues must be confirmed. First, whether is the accounting information false? When judging this problem, professional accounting personnel and non-professional personnel always depend on different standards and obtain different conclusions. The references of professional personnel are the accounting rules and accounting systems, but the references of the non-professional personnel are the facts. The professional personnel pays more attention to whether the procedure of the accounting treatment is legal, and non-professional personnel would emphasize whether the result of accounting treatment is true, and both would obtain different judgment results. Second, does the false accounting information belong to intent, ordinary negligence, gross negligence, or deception? The intent and the deception need to undertake civil liability and criminal liability, and the negligence only undertakes the civil liability. According to different identification conclusions, the court would make different legal judgments. It is difficult to make exact judgment for the personnel with single legal knowledge or accounting knowledge. Third, what loss does the false accounting information bring to users? The losses suffered by the accounting information users when they make decisions