What Does A Forensic Accountant Do?
Forensic accounting refers to an approach taken toward accounting that involves auditing, accounting, and investigating the financial assets of an individual or a business to identify any inconsistencies or errors. Forensic accounting is done for several reasons, and forensic accountants mostly aim to find evidence of fraud, crimes, and withholding of information. They are mostly hired by law enforcement agencies, financial institutions, insurance companies, and married couples headed for divorce for their fraud investigation services. Let us find out what forensic accounting is and what the roles of a forensic accountant are.
Benefits of Hiring a forensic accountant
In many cases, business owners, and other individuals, find themselves riddled with financial discrepancies or fraudulent activities carried out by others. If you lack the expertise, technical knowledge, or resources required to discover the issue's core, you might find it hard to conduct a proper investigation. In this situation, you would benefit from hiring a well-equipped forensic accountant with the resources and knowledge required to get to the root of financial discrepancies. One could benefit from hiring forensic accountants in the following situations:
- They can help conduct investigations and procure evidence that can act as competent evidence in legal proceedings.
- Forensic accountants are well-capable in analyzing financial records and pointing out discrepancies and potentially fraudulent activities by identifying irregular patterns and anomalies.
- Suppose you are involved in a situation that requires discovering hidden assets or misappropriation. In that case, you will benefit from the various techniques used by forensic accountants that help them follow money trails.
- Their opinion is taken seriously in legal proceedings, and they can testify against individuals involved in financial misconduct. Attorneys often hire financial accountants as they can help develop legal strategies that increase the chances of success in legal procedures.
Roles of a Forensic Accountant
The responsibilities of a forensic accountant include tracing funds, identifying assets and their recovery, and carrying out due diligence. However, some of the roles of forensic accountants are as follows:
- Litigation: Litigation involves the indulging of a party in legal procedures for various reasons, including fraud, money embezzlement, and several financial discrepancies. A Forensic accountant can help quantify damages, allowing parties caught up in legal disputes to solve them conveniently. An individual can expect a forensic professional to help them figure out court decisions such as compensations with ease. Moreover, the opinion of a forensic accountant can prove to be a key determinant of a court decision when presented accurately.
- Investigating criminal offenses: A professional in forensic accounting is expected to help analyze crimes and determine whether criminal intent is involved. Criminal activities requiring the involvement of fraud investigation services offered by professionals include insurance fraud, falsified financial information, securities fraud, and identity theft.
- Smoother and fair divorce proceedings: Forensic accountants can track down hidden assets when provided with enough information regarding a subject. This allows easier and fair valuation of marital assets of both individuals, which in turn helps figure out child support and alimonies.
- Insurance fraud and other activities: The insurance industry often witnesses several instances in which the determination of damages is required. Quantifying economic damages done to vehicles because of accidents can be done with the help of a forensic accountant. They can also help determine medical compensation a client is entitled to in case of medical malpractice.
Forensic Accounting techniques used by professionals:
Forensic accountants utilize several different techniques during investigational procedures to ensure the reliability of results, some of which are as followings:
- Document reviews: It is the very first step taken by a professional, which involves an in-depth review of the available financial documents, including information in the physical domain. Document reviews also include a thorough background check of an individual or a company to understand how it has handled financial situations.
- Conduction of Interviews: This technique helps the forensic accountant better understand all the facts about a case being handled and extract information from even the most unwilling witnesses. Every detail must be considered during interviews to ensure no missing link remains uncovered. This allows the professional to obtain more accurate investigative results.
- Surveillance and analysis of evidence: This investigation technique is widely used, and the financial accountant monitors all the emails and messages the subject receives to uncover sensitive information. Conducting a thorough analysis of the evidence gained by these investigative techniques can help professionals uncover the extent of fraudulent activities and identify the guilty parties involved. The information obtained on the basis of evidence can also be used to address and eliminate loopholes that can be exploited by other parties to conduct fraudulent activities.
Forensic accounting is a technical professional and should be resorted to in case an individual feels like they are being deceived into financially disadvantageous positions. The professionals conducting these investigations must know the judiciary provisions to handle financial discrepancies and criminal activities. Business owners often face losses because they are unaware, and they are suggested to contact forensic accountants to avoid uninformed financial decisions and losses. NSKT Global houses a team of skilled and experienced accountants that can help individuals easily handle fraudulent activities and other matters of financial distress. Let an experienced and seasoned team of accountants take this burden off your shoulder, and obtain an advantageous position, no matter how critical the case is. Obtain high value for money, as our global partners help us identify fraudulent activities, no matter how diligently they’ve been carried out. Reach out to our team to understand how you can leverage the services offered by NSKT Global in your favor. Book a free appointment with one of our experts, and avail the services you would benefit from now!