Forensic Auditing In Corporate Fraud: Analysis Of The Satyam And PNB Scandals In India
- IJLLR Journal
- Jun 22
- 1 min read
Rayna Yagnesh Joshi, OP Jindal Global University
ABSTRACT
This paperexamines the development and implementation of forensic auditing as a multidisciplinary mechanism for detecting and responding to large-scale corporate fraud in India, with a focus on the Satyam Computer Services and Punjab National Bank (PNB) scandals. Through theoretical analysis and profound case study, the paper reveals how forensic auditing differs from typical statutory audits by employing a scepticism-driven, legally sound technique that is capable of exposing purpose, identifying concealment, and reconstructing financial truth. It addresses the central question: How has forensic auditing emerged as a response to the limitations of traditional audit mechanisms, and in what ways has it operated as a tool of legal and regulatory accountability in major Indian corporate frauds? Drawing on concepts such as the Policeman Theory and Routine Activity Theory, this paper places forensic auditing in the context of institutional change and structural monitoring. The Satyam case exemplifies promoter- driven financial misreporting, whereas the PNB scam reveals systemic flaws in public banking infrastructure, both demonstrating the critical role of forensic audits in facilitating prosecutions, shaping regulatory responses, and prompting reforms such as auditor rotation and increased investigatory powers. Comparisons with the ongoing financial investigations in India's startup scene highlight its current relevance, as forensic audits are increasingly viewed as crucial to maintaining investor trust and ethical governance. The research suggests that forensic auditing should be considered not only as a reactive post-fraud method, but also as an important component of preventive compliance and regulatory architecture in India's evolving corporate landscape.
Keywords: forensic auditing, corporate fraud, Satyam scandal, PNB scam, statutory audit limitations, corporate governance, regulatory reform, financial transparency.
