Governance and the Law

A forensic accountant’s role in a civil action is usually to draw out information from accounting records and establish relevant facts (Fenton & Isaacs, 2012). In the Labelmakers Group Pty Ltd v LL Force Pty Ltd case two forensic accountants were engaged by each party to examine relevant records and provide reports. They were required to calculate the profit margin, discount rate, loss of profit on paper sales and accounts of profits. The profit margin was calculated to identify losses of sales revenue and to indicate the impact of clients transferring their business away. The discount rate was calculated to be applied in calculating the quantum of the applicant’s losses as a result of the respondents misconduct in order to assist in recognising the resulting damages of each party. The loss of profit on paper sales was calculated to identify the implications of lost business on paper quantity ordered and the revenue from these sales.   Under the accounts of profits,...

Under strict/vicarious liability an employer can be held liable for the actions of their employees even if the employee engages in criminal or fraudulent behaviour (Smit & Viviers, 2016). In Australia, liability can arise under contract law, tort, criminal law or other statutes (Ryding & Reisz, 2016) . I do agree that making employers liable for their employee’s actions is a great motivation to minimise fraud, bribery and corruption; however, I disagree that it is the only solution. The backhand in a workplace could be that an employer withholds information that might lead to the conviction of an employee in the fear that they will become equally convicted initiating another area of fraud. The Royal Commission produced a report into misconduct in the banking, superannuation and financial services industry that identified types of crime. Vendor fraud was a main issue of the report due to banks charging fees for services that were not provided (Hayne, 2017) . Vica...