Forensic Accountancy

Forensic accounting, financial accounting or forensic accountancy is the specialization field of accounting which investigates whether companies engage in any financial fraud. Forensics accountants apply a host of techniques and skills to prove if there was indeed financial fraud committed. Usually, there are some high officials who are in charge of finding and exposing any kind of fraud in the company or industry. These people are called the fraud investigators.

These investigators carefully look into every transaction and scrutinize all the information provided by the companies in order to find whether there was fraudulent activity going on. They carefully study each and every transaction and its documents and take note of every movement made in and out of the company. They look for any suspicious transactions, misspelling, inconsistencies in dates and numbers, absence of documentary proofs and so on. After careful scrutiny, if any fraudulent activity is found, then these auditors make reports to their seniors or senior management of the company and present it to them. At times, they are asked by their seniors to go forward and commence legal proceedings against the erring company.

bookkeeping

The forensic accounting audit is done by the public accountant. The forensic accountant is someone who is a professional in all the professional fields of accountancy like corporate finance, public sector banking, insurance, wealth management, investment, mergers and acquisitions, tax, internal control, compliance management etc. Their job is to examine all documents of the company and conduct thorough analysis of all activities related to the company’s finances. If there is fraudulent activity going on in the company, then the forensic accountant would expose it to the public and the duty of the public accountant is to find out about such activity and report it to the relevant authorities.

Importance of Forensic Accountancy

The forensic accountants carry out financial services research for their clients. These services research and investigate all crimes related to the financial statements of the company. These include the following: money laundering, crime of fraud, embezzlement, fraudulent transactions, criminal activities, financial fraud etc. They also provide testimony in court of law in cases of crimes like theft, terrorism, tax evasion, etc.

The forensic accountants play an important role in exposing any financial fraud committed by the company. The financial findings can help the creditors of the erring company as well as the creditors of the company to get their money back. As the forensic accountants follow the steps of the law strictly, then they are protected from lawsuits by the erring parties. As the importance of such services is high, the forensic accountants earn very good salaries. The median salary of forensic accountants is around twenty thousand dollars.

The forensic accountants also play an important role in the financial industry in holding meetings between the police and the criminals for negotiating and discussing the crime details. This further reduces the crimes rate. Certified public accountants act as consultants of the forensic accountants. A Certified public accountant can help the police in convicting the criminals and can also assist them in providing the necessary information needed for legal proceedings.