What You Should Know About Forensic Accounting

Fraud is a significant problem for individuals and businesses. When some type of financial fraud is suspected, courts and other organizations often rely on forensic accounting to investigate. Here’s what you should know about forensic accounting.

What is Forensic Accounting?

Forensic accounting is a part accountant and part detective. Forensic accounting aims to look beyond the numbers from financial reports for signs of fraudulent activity. People who perform forensic accounting are known for their understanding of fiscal systems, attention to detail, and a keen eye towards anything that appears out of place. A forensic accounting project may take several days, weeks, months, or years to complete.

When is Forensic Accounting Used?

Forensic accounting is used in situations where any type of financial fraud may have been practiced. Some of the most common areas that rely on forensic accountants are:

• Criminal, civil and family courts
• Insurance companies
• Internal Revenue Service
• Estates
• Homeland Security
• Shareholders

What to Expect from Forensic Accounting

A forensic accounting procedure has three distinct phases. First, an investigation is performed during which records of the company or individual are reviewed. This is an intense review that may cover several years of financials in great detail. Second, the forensic accountant puts together a comprehensive report of the findings, including supporting documents and evidence. Third, the report from the forensic accountant is used for the applicable litigation proceedings.

What are the Qualifications of a Forensic Accountant?

Being a forensic accountant is a fascinating and rewarding career field. If you are interested in becoming this type of accountant or being investigated by a forensic accountant, understanding, the qualifications are essential. People may have degrees in accounting, finance, or forensic accounting. The individual should work in basic accounting positions for one to three years. Certifications are available for forensic accounting, such as Certified Fraud Examiner and Certification in Financial Forensics. This credential requires an examination and 5,000 hours of fieldwork. Forensic accountants may belong to various field-specific professional associations, such as the Institution of Certified Forensic Accountants, National Association of Forensic Accountants, and Association of Certified Fraud Examiners. These memberships grant access to peer-reviewed publications, conferences, and other resources to stay current in forensic accounting developments.

Originally published: https://colemurphyharris.net/what-you-should-know-about-forensic-accounting/