What does a forensic accountant do? Jobs | Types
Forensic accountants are specialized accountants who use their expertise to investigate and resolve financial crimes. They work with law enforcement officials to track down and recover the stolen money and to identify and prosecute financial criminals.
Forensic accountants may also be called expert witnesses to testify in court proceedings. Their skills are in high demand in today's complex financial world.
The blog lists some of the jobs which a forensic accountant engages in.
False accounting and fraud investigations
Professionals in fraud investigations often refer to the 'fraud triangle. Several versions exist, but in essence, the concept of the fraud triangle is the theory that fraud is most likely to happen when three factors are present: pressure (financial or emotional), opportunity and rationalization, i.e. justification for the steps taken to perpetrate the fraud.
Quantification of loss (including personal injury)
If an incident or accident occurs that was not caused by the affected party, it is expected that the wronged party will seek redress. In such a case, a forensic accountant will assess the impact and quantify the loss suffered.
Unfortunately, occasionally, accounting professionals do not carry out their assignments with the due care and competence their professional regulatory body requires. Forensic accountants can review the working papers of tax advisers, auditors or other accounting professionals to assess whether they have acted negligently and, if so, the loss arising from the failure to fulfil their professional and contractual responsibilities.
A common oversight when considering the services of a forensic accountant is to disregard the proactive approaches that can be utilized to minimize the potential of fraud. Fraud prevention reviews can be targeted at specific areas and look into the detail more closely than a financial statements audit.
A commercial dispute can arise for several reasons, and the scope of the work carried out by forensic accountants will depend on the features of the dispute. Many commercial disputes will relate to or require a business valuation.
If a party has suffered a loss but decides not to litigate, they may wish to claim from their insurance policy. In this instance, a forensic accountant will quantify the amount claimed under the insurance policy. The insurance company may appoint its expert.
A typical instruction from family solicitors is to value a business as part of matrimonial proceedings. It is also usual to be asked to assess the maintainable level of earnings to assist the lawyers' negotiation of the settlement agreement.
While many businesses start with unity and good intentions, it is sometimes the case that disputes arise between business partners. This can be particularly problematic as many friends and family who go into business do not draft a formal shareholder or partnership agreement; the business lacks a robust governing document.
A forensic accountant can be instructed as an expert witness to act for the defence or prosecution in a criminal matter. The type of case can expand to anywhere the need for expert input on figures is required.
Forensic accounting is a specialized and exciting field that offers many opportunities for career growth. If you are interested in pursuing a career in forensic accounting, eduyush offers an online course that will give you the skills and knowledge you need to succeed in this field.
With its comprehensive curriculum and experienced instructors, eduyush is the perfect place to start your journey toward a fulfilling career in forensic accounting.