Enhancing Forensic Accounting Practice: A Proactive Risk Management Framework for Chartered Accountant Firms

Forensic accounting faces increasing complexity as reactive approaches fail to address escalating risks. This study pioneers a Proactive Risk Intelligence Framework (PRIF) for Chartered Accountant (CA) firms, targeting gaps in risk anticipation, stakeholder communication, and compliance. Employing mixed-method-design interviews with 30 risk advisors, case studies, and analysis of 30 forensic reports, the PRIF was developed and validated using thematic coding, risk metrics, and Delphi panel refinement. Integration of AI and blockchain reduced the risk detection time from 47 days post-event to 9–22 days pre-event, with accuracy increasing from 62% to 89–94%. The Stakeholder Communication Index (SCI) revealed a strong correlation (r = 0.83) between report quality and client retention (91% for high SCI vs. 54% for low SCI). PRIF adoption reduced compliance resolution time by 58% and financial misstatements by 47%, yielding an average ROI of 83%. This integrated framework combines real-time monitoring, stakeholder-centric reporting, and dynamic compliance for CA firms. While the findings are based on India-focused samples, practical benefits include scalable toolkits for firms and policy guidance for regulators with a broader impact on financial governance. PRIF shifts forensic accounting from reactive detection to proactive prevention, advancing stakeholder trust and industry standards.