With businesses growing and expanding into more and more complex systems resulting in a wide range of investigative procedures, forensic accounting services are increasingly required to deal with financial and business related issues. Read on to find out exactly what Forensic Accounting is and when you may need it.
What is a Forensic Accountant?
So what is a forensic accountant and what does he actually do? Well, a forensic accountant is someone whose job is to investigate financial fraud and embezzlement – in short, they are financial detectives. They also provide support to law enforcement agencies tasked with investigating financial crimes. They are trained to analyze complex financial issues and present them in a comprehensible manner. They are employed privately as well as by the government agencies.
How are Forensic Accountants Important?
Unfortunately, in today’s society moral integrity is becoming more of a secondary matter – the ultimate aim of the majority of the people is to accumulate wealth which is leading to illegal means being blatantly used for financial benefit: accountants in large as well as small businesses are involved in fraudulent financial report; theft of cash and property – physical as well as intellectual is becoming more common; corruption is getting widespread.
Check out an instance of such business fraud here.
This sorry state of affairs necessitate the role of forensic accountants who are trained to prevent financial wrongdoing by working with large companies and managers and by making sure that the internal accounting system is transparent.
When Could a Forensic Accountant Benefit?
With their unique blend of accounting education combined with investigative financial skills they can be relied on in several complex financial situations.
They can be employed in commercial fraud investigations, for example, their opinion can be sought regarding profit dispute, breach of contract, product liability, illegal competition, construction claims and so on.
They can also assist in personal injury claims. They are able to deal with the many issues related with understanding and calculating the losses resulting from road accidents and clinical negligence.
Forensic accountants are also engaged to analyze company accounting records to help settle disputes regarding benefits and compensation among partners and shareholders.
Their role is also of key importance in tracing misappropriation of funds in business, identification of property and its recovery and examination of suspects through interviews etc.
Their assistance is also sought in settling matrimonial issues, for example, the division of assets when people decide to divorce etc.
In short, forensic accountants could be employed in almost all instances of financial fraud and litigation regarding financial and economic litigation and compensation.
Larger accounting practices have an in-house forensic accountant, but there are specialist companies in the UK who can help. When choosing a company to work with, look for a company such as Frenkels Forensics who have a strong track record and experience. Choosing the wrong firm could result in a damaging experience for both you and for your company.