THE ROLE OF FORENSICS AND AUDITING IN FIGHTING FINANCIAL FRAUD

Abstract

The purpose of the article is to substantiate the importance of using audit and forensic accounting as important tools for combating financial fraud in modern business conditions. The development of financial technologies, the increasing complexity of economic transactions and the digitalization of accounting systems have led to a significant increase in the risk of fraud in the corporate environment. Accordingly, the relevance and necessity of the use of independent financial audit and forensic financial analysis (forensic accounting) is constantly growing, especially in light of recent global financial and corporate scandals. The study emphasizes that financial audits primarily perform a preventive and confirmatory function aimed at assessing the accuracy and reliability of financial reporting, identifying accounting anomalies and indicating violations that may indicate fraudulent intentions. In contrast, forensic accounting combines financial expertise with investigative methods and is used not only to detect fraud schemes and assess losses, but also to prepare expert evidence for legal proceedings, including court cases. Methodology of research. Particular attention is paid to a comparative analysis of auditing and forensic accounting based on several key aspects: audit objectives, analytical methods, expected results and their role in the broader financial control system. It is emphasized that while audits are often periodic and structured, forensic audits are usually situational, detailed and reactive in nature. The integration of both approaches allows for the creation of a comprehensive and multi-layered fraud prevention system. Findings. The paper emphasizes the growing role of innovative technologies, such as artificial intelligence, machine learning, big data analytics and automated control systems, in improving the quality, efficiency and speed of audits and legal investigations. In addition, an analysis of statistical data on the number of criminal proceedings for financial fraud in Ukraine in recent years confirms the relevance of introducing reliable financial control mechanisms. Practical value. The study concludes with a statement about the urgent need to improve the regulatory framework and invest in the continuous professional development of auditors and forensic experts to ensure effective detection and prevention of fraud in the digital era.