Forensic accounting involves looking beyond the numbers and grasping the substance of situations. It's more than accounting, which resemble more of detective work.
Forensic accountants are financial detectives who audit, investigate and ascertain the accuracy of financial reporting documents, often in connection with anticipated or ongoing legal action. They are responsible to analyze and highlight any curiosity or issues on these financial data, chiefly for the purpose of investigating white-collar crimes. They work closely with businesses, nonprofit organizations (including government and law-enforcement agencies), estates, individuals and others who require forensic-accounting services.
The forensic accountant may provide assistance in areas such as:
o Investigating and analyzing financial evidence;
o Quantifying damages related to income and other losses;
o Fraud investigations of real estate transactions, mortgage lending, and business and asset issues in divorce;
o Providing assistance to counsel in the analysis of financial records in connection with a partnership dispute;
o Calculating economic damages related to wrongful death;
o Assisting counsel with financial investigation in connection with loss of collateral; and
o Assisting counsel and shareholders in connection with misrepresentations affecting business valuations.
Forensic audits need to be carried out frequently so as to make sure consistent investigations are carried out without fail. Here are some examples of projects that may rely on forensic acconting and finance expertise at the same time,
1. Insurance fraud -
a. Insurance agent has a lot of access to personal information of his customers. A common fraud scheme found is agent faking the application for his customer to withdraw a lumpsum loan or some amount of insurance claim on the insurance policy.
b. People falsify claims to insurance companies for compensation.
2. Construction audits -
a. This is to ensure the construction company adhere to the quality of the materials they have committed for the constuctions per the written contract.
b. So as to protect those whom has borrowed the housing loans from. The last amount of the banking loan for any construction should only be released to the developer/constructor company if the constructor is at least 90% completion.
3. Royalty audits - forensic accountant to help settle the dispute where in some cases, a worker, usually a performer, or an artist is owed royalties for the showing or airing of his work.
4. Matrimonial disputes - Divorce settlements often brought in the skill of a forensic accountant to assure both parties get fair settlement, s far as property, and child custody are concerned.
5. Bankruptcy audits - Investigate cases of bankruptcy, review and present fair conclusion and judgement if the bankruptcy declare is exact and genuine.
For more information about forensic accounting career and benefits of forensic accounting, visit ForensicAccountingDemystified.com.
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