6.0 Forensic accounting
Forensic accounting has been adopted as a countermeasure to fraud especially to fight the practice of “false” suppliers (Power, 2013). Traceability tests and second party audits will provide more information for focused forensic accounting. Indeed, it was a recommendation of the Elliott Review (2014) that the UK government should “support the work of standards owners in developing additional audit modules for food fraud prevention and detection incorporating forensic accountancy and mass balance checks.”
Considering the risk of food crime which can encompass both the technical areas of responsibility within the food supply chain as equally as the administrative areas of responsibility,food auditors (food crime / fraud assessors) should work hand in hand with accountant during the verification process. Via processes such as fraud forensics, the consistency of records and documentation can be considered giving the potential for fraud-like trends to be traced. Market knowledge is essential to undertake this role. Activities such as mass balance testing for batches and production runs forms part of this verification activity (Figure 3). Auditors should ensure actual production matches the documented product flow in order to minimize the risk of fraudulent activity such as simulation, over-run, substitution or adulteration.