What is Forensic Accounting and What Does a Forensic Accountant Do?

Forensic Accounting utilizes accounting, auditing, and investigative skills to conduct an examination into a company’s financial statements which is suitable for court. Forensic is sufficiently thorough and complete so that an accountant can deliver his finding in some adversarial legal proceeding, or within some judicial or administrative review.

Forensic accounting and litigation support includes services (Certified Public Account) CPAs provide in legal matters. Forensic Accounting encompasses both Litigation Support and Investigative Accounting.

The primary methodology employed by forensic accountants is objective verification. Forensic Accountants can be engaged in public practice or employed by insurance companies, banks, police forces, government agencies and other organizations. Forensic accounting and litigation support includes services CPAs provide in legal matters.

Forensic accountants, also referred to as forensic auditors or investigative auditors, often have to give expert evidence at the eventual trial. Some forensic accountants may specialize in insurance claims, personal injury claims, fraud, construction, or royalty audits.

Forensic accountants utilize an understanding of business information and financial reporting systems, accounting and auditing standards and procedures, evidence gathering and investigative techniques, and litigation processes and procedures to perform their work.

Forensic accountants refers to a certified Public accountant are also increasingly playing more proactive risk reduction roles by designing and performing extended procedures as part of the statutory audit, acting as advisers to audit committees, fraud deterrence engagements, and assisting in investment analyst research.

A forensic accountant is involved in the following:

Investigating and analyzing financial evidence;
Developing computerized applications to assist in the analysis and presentation of financial evidence;
Communicating their findings in the form of reports, exhibits and collections of documents; and
Assisting in legal proceedings, including testifying in court as an expert witness and preparing visual aids to support trial evidence.

Forensic accountants are experts that use a unique combination of experience and education to apply auditing, accounting and investigative skills in order to uncover the truth, assist in investigations and form legal opinions, they are more than just number crunchers. They are independent and impartial, taking into account both the financial records and the conduct of employees.

They are part of the extension of the legal team and are responsible for preparing or reviewing financial evidence. Forensic Accountants are trained to look beyond the numbers and deal with the business reality of the situation.

Unlike other accountants, when forensic accountants conduct audits, they are actively looking for signs of fraud. Forensic accountants also resolve disputes, during courtroom proceedings. If a dispute is brought to the courts notice, the forensic accountant can testify as a witness.

It has been proven that thorough, reasoned and well structured forensic accounting reports greatly increase the chances of a satisfactory settlement.

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