CONCEPTUAL ANALYSIS OF THE APPLICATION OF FORENSIC ACCOUNTING IN DETECTING AND PREVENTING FINANSIAL FRAUD

Abstract

The digitalization of financial systems has significantly increased the complexity and sophistication of financial fraud, posing substantial challenges to traditional auditing and control mechanisms. This study aims to conceptually analyze the application of forensic accounting in detecting and preventing financial fraud in the digital era. Using a qualitative literature review approach, this research synthesizes and critically examines prior scholarly works on financial fraud, forensic accounting, and digital financial environments to identify key themes, conceptual patterns, and research gaps. The findings reveal that forensic accounting plays a dual role in digital contexts, functioning not only as a reactive investigative tool but also as a proactive mechanism for fraud prevention when integrated into organizational governance frameworks. The study highlights the importance of incorporating forensic accounting with digital technologies and internal controls to enable early fraud detection, continuous monitoring, and strategic risk mitigation. This research contributes to the literature by reconceptualizing forensic accounting as a core component of integrated digital fraud governance and provides theoretical insights for future empirical studies as well as practical guidance for organizations and regulators in strengthening fraud prevention systems in the digital era.