What is Forensic Finance?

What is Forensic Finance? surveys a growing field studying aspects of finance that are potentially illegal, illicit, or immoral. The monograph is structured in three main parts. First, the authors identify forensic papers published in top finance journals to broadly describe the field and its potential impact. Second, common themes and suggestions for impactful work are summarized. Third, the authors review important recent forensic research, organized by four main topic areas: financial reporting misconduct, financial market misconduct, financial advisor misconduct, and public finance misconduct. Financial reporting misconduct includes misreporting by corporations and investment firms, misreporting and related issues in structured finance (e.g., residential and commercial mortgage-backed securities), and misreporting of environmental, social, and governance measures, often referred to as greenwashing. Within financial market misconduct, the monograph reviews cryptocurrencies, market manipulation, and insider trading. Financial advisor misconduct consists of fraud and other forms of misconduct by brokers and other financial advisors. Within public finance misconduct, the monograph examines public corruption, tax evasion, and government program fraud. The monograph concludes with suggestions for future research and thoughts on how to shape the future of forensic finance.