The Serious Fraud Investigation Office (SFIO) recently arrested a chartered accountant in Hyderabad in connection with his role during the demonetisation period.
About Serious Fraud Investigation Office (SFIO)
- It is a corporate fraud investigating agency set up by the Government of India.
- It is a multi-disciplinary organization under the Ministry of Corporate Affairs.
- It consists of experts in the fields of accountancy, forensic auditing, law, information technology, investigation, company law, capital market and taxation.
- Objective: For detecting and prosecuting or recommending for prosecution white-collar crimes and frauds.
- History: It was setup in 2003 on the basis of recommendations of Naresh Chandra Committee on corporate governance in the backdrop of stock market scams, failure of non-financial banking companies and the phenomena of vanishing companies and plantation companies.
- Investigation into the affairs of a company is assigned to SFIO, where the Government is of the opinion that it is necessary to investigate into the affairs of a company-
- On receipt of a report of the Registrar or inspector under section 208 of the Companies Act, 2013
- On intimation of a special resolution passed by a company that its affairs are required to be investigated
- In the public interest or on request from any department of the Central Government or a State Government
- Organisational Structure:
- SFIO is headed by a Director as Head of Department in the rank of Joint Secretary to the Government of India.
- The Director is assisted by Additional Directors, Joint Directors, Deputy Directors, Senior Assistant Directors, Assistant Directors Prosecutors, and other secretarial staff.
- Headquarters: The headquarters of SFIO is in New Delhi, with five Regional Offices in Mumbai, New Delhi, Chennai, Hyderabad and Kolkata.
Q1) What is forensic auditing?
Forensic auditing, also known as forensic accounting, is a specialized area of accounting that involves the examination of financial records, transactions, and related documentation to uncover and investigate financial irregularities, fraud, or other financial misconduct. It combines accounting, auditing, and investigative skills to analyze financial data in a way that can be used as evidence in legal proceedings or to support investigations.