Abstract:
As the literature argues just an auditor opinion about the true and fair view of
financial statements do not fully cater to detect frauds that affect the survival
of organizations. This paper explores whether auditors practice and integrate
Forensic Accounting Skills (FAS) in performing their audits as a mean of
reducing auditor expectation gap in the private sector in Sri Lanka. The study
design was exploratory. The sample was 80 respondents selected randomly as
40 client accountants and 40 auditors from two audit firms in Matara District.
Data was collected using questionnaires. The collected data was analyzed
quantitatively using SPSS. The study found that very limited number of
respondents (32.5 percent) attempts to practice Forensic Accounting Skills in
performing their final audits although it is required by the auditing standards.
However, usage of FAS is limited as the auditors are doing sample based audits
in many cases. Moreover, limited time and lack of forensic accounting skills
and knowledge are key barriers in integrating forensic accounting skills in final
audits. Although there are some studies in this filed for Sri Lankan context, the
usage of forensic accounting skills in performing final audits by collecting data
from both accountants and auditors has scarcely been studied. Further, this
study would help in bridging knowledge gap between auditing and forensic
accounting. Findings of this study may assist the practitioners and
policymakers to reassess and reformulate the function and the role of auditor
in the current context in Sri Lanka and to develop policies, procedure and
guidelines to perform the audit function in Sri Lanka appropriately
