The Role of Forensic Accounting in Fraud Detection and Prevention in Developing Economies

Abstract

Regulatory bodies in developing countries are often less well-established, making forensic accounting increasingly important for detecting and preventing financial crime. This research examines how the adoption of forensic accounting methods can enhance transparency, prevent corruption, and strengthen accountability in regions with limited regulatory infrastructure. Through case studies and real-world examples, the analysis highlights both the challenges and benefits that forensic accountants encounter in environments characterized by political influence and constrained resources. Forensic accounting has proven effective in uncovering financial irregularities and deterring fraud. When coordinated with government regulations and legal frameworks, forensic accounting significantly reduces fraud, thereby supporting economic stability and fostering investor confidence. The study underscores the importance of capacity building, legislative support, and international collaboration to improve the application of forensic accounting in developing countries. Recent advancements, such as the integration of blockchain analysis and forensic data mining, have expanded the scope and accuracy of forensic investigations. These innovations have made it easier to conduct effective monitoring and detect fraud in financial activities, reinforcing the ongoing relevance of forensic accounting. As financial crimes become increasingly complex globally, forensic accounting remains essential for ensuring economic security, promoting accountability, and restoring public trust in developing countries. However, the study is limited by its regional focus and reliance on publicly available data.

Keywords: Forensic Accounting, Financial Crime, Transparency, Developing Countries