Forensic Accounting and Information Systems Auditing: A Coordinated Approach to Fraud Investigation in Banks

Abstract

This research examines the coordinated application of forensic accounting techniques and Information Systems auditing in bank fraud investigations, with particular focus on uncovering concealed financial misstatements and sophisticated fraud
schemes. Through comprehensive analysis of 132 documented bank fraud cases
across North America, Europe, and Asia from 2018 to 2021, this study develops an
integrated investigation framework that leverages the complementary strengths of
both disciplines. The research introduces a novel Coordinated Fraud Investigation
Index (CFII) that quantifies investigation effectiveness across financial analysis, digital evidence collection, and investigative integration dimensions. Empirical results
demonstrate that coordinated investigations achieve 67% higher fraud detection
rates and 54% faster case resolution compared to isolated disciplinary approaches.
The study reveals that concealed financial misstatements account for 42% of sophisticated bank frauds, with digital evidence from IS audits proving critical in 78%
of successful investigations. Findings indicate that successful coordination requires
structured collaboration protocols, shared investigative methodologies, and integrated reporting frameworks. This research contributes both theoretical advancements in fraud investigation methodology and practical implementation guidelines
for banking institutions seeking to enhance their fraud detection and investigation
capabilities through disciplinary integration.