Why Forensic Accounting Under IND AS Matters in 2025
- Introduction to Forensic Accounting Under IND AS
- What is Forensic Accounting in the Indian Context?
- How IND AS Provides Framework for Forensic Scrutiny
- Key FAIS Standards that Support IND AS-Based Investigations
- Practical Application: Fraud Detection with IND AS Lens
- Benefits for CAs & Forensic Professionals
- FAQs
- Conclusion
Introduction to Forensic Accounting Under IND AS
As India tightens its grip on financial transparency, forensic accounting has become a vital tool in combating white-collar crimes. At the same time, the adoption of Indian Accounting Standards (Ind AS) has significantly enhanced the quality and clarity of financial reporting.
Together, these developments form a powerful duo—Ind AS provides the structure, and forensic accounting delivers the scrutiny. For Chartered Accountants (CAs) and finance professionals, understanding how these two frameworks complement each other is not just beneficial—it’s essential in 2025.
What is Forensic Accounting in the Indian Context?
Forensic accounting involves the application of accounting, auditing, and investigative skills to examine financial statements and uncover fraud, embezzlement, or legal disputes. Unlike traditional auditors, forensic accountants go beyond compliance checks. They dig deep into financial anomalies, tracing transactions, reviewing digital evidence, and preparing documentation admissible in court.
In India, forensic accounting has grown in prominence with high-profile scams and regulatory scrutiny becoming more common.
How IND AS Provides Framework for Forensic Scrutiny
Ind AS, aligned with IFRS, emphasizes transparency, consistency, and comparability in financial reporting. For forensic professionals, this creates a standardized baseline that makes anomalies easier to detect.
Key Ind AS principles aiding forensic accounting include:
Fair Value Measurement (Ind AS 113): Helps detect manipulation in asset valuation.
Revenue Recognition (Ind AS 115): Highlights discrepancies in income reporting.
Related Party Disclosures (Ind AS 24): Uncovers hidden transactions between connected entities.
These standards force companies to maintain more detailed and auditable records, reducing ambiguity and enhancing the effectiveness of forensic analysis.
Key FAIS Standards that Support IND AS-Based Investigations
To bring structure to forensic investigations, the ICAI introduced the Forensic Accounting and Investigation Standards (FAIS), applicable from 1 July 2023. These standards complement Ind AS by offering a methodology for conducting investigations.
Some notable FAIS standards include:
FAIS 110: Defines engagement terms and forensic accountant responsibilities.
FAIS 120: Outlines procedures for fraud risk assessment.
FAIS 140: Covers evidence collection and preservation, including digital data.
FAIS 150: Sets reporting standards for litigation and audit purposes.
These standards ensure that forensic audits under Ind AS follow a rigorous, repeatable process—enhancing their credibility in both courts and boardrooms.
Practical Application: Fraud Detection with IND AS Lens
A notable example illustrating this synergy is the IndusInd Bank case, where the lender tapped Grant Thornton to investigate potential financial irregularities under regulatory scrutiny.
This investigation was not just forensic in nature—it required interpreting data through the lens of Ind AS disclosures, revenue records, and digital evidence. The combined use of FAIS protocols and Ind AS documentation created a strong forensic foundation that stood up to both SEBI and internal compliance reviews.
Such cases demonstrate how Ind AS-based financials become the starting point for forensic red flags—triggering deeper probes using FAIS methods.
Benefits for CAs & Forensic Professionals
Forensic accounting under IND AS offers multiple benefits to finance professionals:
Improved Litigation Support: FAIS reports prepared on Ind AS data are more court-admissible.
Enhanced Credibility: Standardized processes under FAIS increase trust in findings.
Better Evidence Handling: Digital evidence preservation under FAIS aligns with audit trails in Ind AS.
Career Upskilling: Adds a new layer of expertise for CAs beyond compliance and taxation.
By integrating forensic methodology into Ind AS audits, CAs enhance their value in regulatory investigations and M&A due diligence.
FAQs
Q1: What is forensic accounting under IND AS?
A: It refers to using forensic investigative methods to analyze financial statements prepared under Indian Accounting Standards (Ind AS) to detect fraud or financial irregularities.
Q2: How does Ind AS aid fraud detection?
A: Ind AS enforces stricter disclosure norms and comparability, making unusual patterns or inconsistencies easier to spot during forensic reviews.
Conclusion
Forensic accounting under IND AS is no longer a side function—it’s central to financial integrity in India. Ind AS provides the transparency and structure, while FAIS delivers the investigative rigour needed to uncover fraud and misconduct.
For CA students and professionals, mastering this intersection opens up career growth, regulatory relevance, and a competitive edge.