FORENSIC ACCOUNTING AND CORPORATE SUSTAINABILITY IN BANGLADESHI COMPANIES: AN EMPIRICAL STUDY
Article Sidebar
Main Article Content
Abstract
Sustainable corporate governance plays a vital role in enhancing transparency, accountability, and long-term organizational performance, particularly in emerging economies such as Bangladesh, where governance vulnerabilities remain persistent. Despite growing recognition of forensic accounting as a tool for strengthening internal controls and reducing financial misconduct, empirical evidence on its influence within Bangladeshi listed companies is limited. This study investigates the impact of forensic accounting on sustainable corporate governance. Data were collected via a structured questionnaire administered to professionals employed by listed companies, yielding 225 valid responses. Sustainable corporate governance was assessed using three core components: the Board of Directors (BOD), Audit Risk Committee (ARC), and Nomination and Remuneration Committee (NRC). Structural Equation Modeling (SEM) was utilized to examine the relationship between forensic accounting practices and sustainable corporate governance. The results reveal that forensic accounting has a significant positive effect on sustainable corporate governance, demonstrated by a path coefficient of 0.090, a standard error of 0.023, a t-value of 3.888, and a significance level of p < 0.01, thereby confirming the proposed hypothesis (H1). The findings indicate that applying forensic accounting enhances sustainable governance structures among Bangladeshi listed companies. Improvements were observed across the BOD, ARC, and NRC indicators, demonstrating that forensic accounting significantly strengthens decision-making processes, reinforces risk oversight, and enhances committee-level governance. Overall, the study provides empirical evidence that forensic accounting plays a measurable role in supporting the key structural components of sustainable corporate governance among Bangladesh's listed firms.
JEL Classification Codes: M42, M14, Q56.
Downloads
Article Details
Section
This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
References
Acharya, V. V., & Volpin, P. F. (2010). Corporate Governance Externalities (SSRN Scholarly Paper No. 1541042). Social Science Research Network. Retrieved from https://papers.ssrn.com/abstract=1541042
Ahmad, S., Alzoubi, A. B. M., & Alkhalaileh, R. (2025). Governance of forensic accounting profession. Corporate Law and Governance Review, 7(3), 106–112. https://doi.org/10.22495/clgrv7i3p10
Akani, F. N., & Ogbeide, S. O. (2017). Forensic accounting and fraudulent practices in the Nigerian public sector. AFRREV IJAH: An International Journal of Arts and Humanities, 6(2), 171–181. https://doi.org/10.4314/ijah.v6i2.13
Albrecht, W. S., Albrecht, C. O., Albrecht, C. C., & Zimbelman, M. F. (2016). Fraud examination (5th ed.). Cengage Learning.
Anwar, S. (2019, October). Corporate governance practices in Bangladesh | The Asian Age Online, Bangladesh. The Asian Age. Retrieved https://dailyasianage.com/news/200124/corporate-governance-practices-in-bangladesh
Appiah, K. O., & Chizema, A. (2015). Remuneration committee and corporate failure. Corporate Governance, 15(5), 623–640. https://doi.org/10.1108/CG-11-2014-0129
Assoratgoon, W., & Kantabutra, S. (2023). Toward a sustainability organizational culture model. Journal of Cleaner Production, 400, 136666. https://doi.org/10.1016/j.jclepro.2023.136666
Azizah, W., Sartono, S., Nasution, F. U., Wulandari, W., & Darminto, D. P. (2025). Forensic Audit: The Integrity Backbone of Sustainability Disclosure. International Journal of Social Science and Human Research, 8(10). https://doi.org/10.47191/ijsshr/v8-i10-65
Bhasin, M. (2015). Contribution of Forensic Accounting to Corporate Governance: An Exploratory Study of an Asian Country. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2676488
Blessing, I. N. (2015). Empirical Analysis on the Use of Forensic Accounting Techniques in Curbing Creative Accounting. 3(1).
BSEC. (2023). Bangladesh Securities and Exchange Commission. Retrieved https://sec.gov.bd/home
Cheng, E. W. L. (2001). SEM being more effective than multiple regression in parsimonious model testing for management development research. Journal of Management Development, 20(7), 650–667. https://doi.org/10.1108/02621710110400564
Das, P. K. (2020). Forensic Accounting in India. American Research and Publication Center (ARPC), 1(5), 1–8.
Elkington, J. (2006). Governance for Sustainability. Corporate Governance: An International Review, 14(6), 522–529. https://doi.org/10.1111/j.1467-8683.2006.00527.x
Guellim, N., Yami, N., Freihat, A. F., Alshurafat, H., Alkababji, M. W., Alzahrane, M., Gad, W. N.-E., Shaaban, M. S. I., & Mostafa, R. M. A. (2024). Evaluating the perceived value of forensic accounting: A systematic review method. Discover Sustainability, 5(1), 351. https://doi.org/10.1007/s43621-024-00431-y
Gupta, M., Aggarwal, P. K., & Gupta, R. (2023). Corporate Sustainability with Forensic Auditing: An Evidence from India. International Journal of Experimental Research and Review, 35, 128–137. https://doi.org/10.52756/ijerr.2023.v35spl.012
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate Data Analysis. 7th Edition, Pearson, New York.
Hussein, Q., Mustawfyah, S., & Efstath Haneh, F. (2024). Corporate Governance and Ethical Leadership: Key Factors in Preventing Financial Statement Fraud and Money Laundering. Journal of Economic Business Innovation, 1(2), 195–216. https://doi.org/10.69725/jebi.v1i2.175
Imoniana, J. O., Antunes, M. T. P., & Formigoni, H. (2013). The Forensic Accounting and Corporate Fraud. Journal of Information Systems and Technology Management, 10(1), 119–144. https://doi.org/10.4301/s1807-17752013000100007
Le, T. T., & Nguyen, V. K. (2022). The impact of corporate governance on firms’ value in an emerging country: The mediating role of corporate social responsibility and organisational identification. Cogent Business & Management, 9(1), 2018907. https://doi.org/10.1080/23311975.2021.2018907
Lombardi, R., Trequattrini, R., Cuozzo, B., & Cano-Rubio, M. (2019). Corporate corruption prevention, sustainable governance and legislation: First exploratory evidence from the Italian scenario. Journal of Cleaner Production, 217, 666–675. https://doi.org/10.1016/j.jclepro.2019.01.214
Louis, C., Nazar, N., & Sivadasan, J. (2025). The role of forensic accounting in strengthening corporate governance and fraud detection. Journal of Research in Emerging Markets, 10(3), 112-127.
Mahmod, S. H. O., Khorsheed, H. S., & Ismael, N. B. (2024). The Impact of Forensic Accounting on Corporate Governance and Compliance. OTS Canadian Journal, 3(8), 1–11. https://doi.org/10.58840/2awnft14
Mousavi, M., Zimon, G., Salehi, M., & Stępnicka, N. (2022). The Effect of Corporate Governance Structure on Fraud and Money Laundering. Risks, 10(9), 176. https://doi.org/10.3390/risks10090176
Napitupulu, T. L., & Purba, R. B. (2025). The Role of Forensic Auditing in Corporate Governance and Risk Management. Proceedings of International Conference on Islamic Community Studies, 142–152.
Osunwole, O. O., Adeyemi, O. A., & Dunsin, A. T. (2020). The influence of accounting ethics on the quality of financial reports among accounting practitioners in Ibadan, Oyo State, Nigeria. Middle European Scientific Bulletin, 1(7), 77–87. https://doi.org/10.47494/mesb.2020.1.145
Rehman, A., & Hashim, F. (2020). Impact of Fraud Risk Assessment on Good Corporate Governance: Case of Public Listed Companies in Oman. Business Systems Research Journal, 11(1), 16–30. https://doi.org/10.2478/bsrj-2020-0002
Rehman, A., & Hashim, F. (2021). Can forensic accounting impact sustainable corporate governance? Corporate Governance: The International Journal of Business in Society, 21(1), 212–227. https://doi.org/10.1108/CG-06-2020-0269
Saeed, M. N., Rahmouni, M., Haroun, M. A., Hassan, E. A., Elfaki, I. O., Tayfor, A. E., & Abbas, A. M. (2025). Analyzing the Impact of Corporate Governance in Enhancing Firms’ Financial Performance and Sustainability. Journal of Posthumanism, 5(3), 181–205. https://doi.org/10.63332/joph.v5i3.726
Saxena, P. K., Seetharaman, A., & Shawarikar, G. (2024). Factors That Influence Sustainable Innovation in Organizations: A Systematic Literature Review. Sustainability, 16(12), 4978. https://doi.org/10.3390/su16124978
Schrippe, P., & Ribeiro, J. L. D. (2019). Preponderant criteria for the definition of corporate sustainability based on Brazilian sustainable companies. Journal of Cleaner Production, 209, 10–19. https://doi.org/10.1016/j.jclepro.2018.10.001
Xanthopoulou, A., Skordoulis, M., Kalantonis, P., & Arsenos, P. (2024). Integrating corporate governance and forensic accounting: A sustainable corporate strategy against fraud. Journal of Governance and Regulation, 13(2, special issue), 327–338. https://doi.org/10.22495/jgrv13i2siart9
Yoshikawa, T., & Rasheed, A. A. (2009). Convergence of Corporate Governance: Critical Review and Future Directions. Corporate Governance: An International Review, 17(3), 388–404. https://doi.org/10.1111/j.1467-8683.2009.00745.x