Before understanding about how forensic accounting works, we should understand the meaning of forensic and its connection with accounting. Forensic is the use of science for solving legal problem. For example, if anybody has murdered any other person. We have to prove it through fingerprints, bloodstains, photos. All are collected by forensic investigators.
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But forensic accounting is different from this. In this, forensic accountant investigates only financial frauds. For example, anybody has cheated the company or fraud relating to property. At that time, forensic accountant or forensic auditor will investigate and show the result of his investigations in the front of court or other higher investigation authorities.
1. Field of Forensic Accounting
Forensic accounting has wide field. It can be used in banking, companies, insurance sector, manufacturing sector, retail sector and any service sector where there is the chance of financial fraud.
2. Collection of Evidence
When any forensic accountant is appointed for investigation of any financial fraud in company. His first duty is to collect the evidences of fraud. He meets the company employees and officers. Take their interviews. Know the hidden information behind the book story of accounting. Then check and search whole accounting records including source documents of accounting. Excepts accounting records, he will check all other database including emails references of company employees with others. Main aim of doing this is to find the parties who did accounting irregularities.
3. Forensic Accountant May be in the Team of Advocates
When court orders to investigate the company for financial fraud. At that time, forensic accountant may be the part of team of advocates. As the area of specialization in accounting and auditing, he can easily find the loop holes and helps advocates to find criminals behind this.
4. What can be Found by Forensic Accountants
Following cases can be solved by forensic accountants
5. Forensic Accountant's Qualification
For becoming forensic accountant, you need professional degree of accounting plus courses in criminal and business laws. In some country, you need to clear certified fraud examiner (DFE) test.
But forensic accounting is different from this. In this, forensic accountant investigates only financial frauds. For example, anybody has cheated the company or fraud relating to property. At that time, forensic accountant or forensic auditor will investigate and show the result of his investigations in the front of court or other higher investigation authorities.
1. Field of Forensic Accounting
Forensic accounting has wide field. It can be used in banking, companies, insurance sector, manufacturing sector, retail sector and any service sector where there is the chance of financial fraud.
2. Collection of Evidence
When any forensic accountant is appointed for investigation of any financial fraud in company. His first duty is to collect the evidences of fraud. He meets the company employees and officers. Take their interviews. Know the hidden information behind the book story of accounting. Then check and search whole accounting records including source documents of accounting. Excepts accounting records, he will check all other database including emails references of company employees with others. Main aim of doing this is to find the parties who did accounting irregularities.
3. Forensic Accountant May be in the Team of Advocates
When court orders to investigate the company for financial fraud. At that time, forensic accountant may be the part of team of advocates. As the area of specialization in accounting and auditing, he can easily find the loop holes and helps advocates to find criminals behind this.
4. What can be Found by Forensic Accountants
Following cases can be solved by forensic accountants
- Embezzling funds
- Laundering profits
- Financial misconduct
- Illegally siphon money
- Manipulating Accounting Numbers
5. Forensic Accountant's Qualification
For becoming forensic accountant, you need professional degree of accounting plus courses in criminal and business laws. In some country, you need to clear certified fraud examiner (DFE) test.
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