‘Forensic Accountant’ is not a term that many people are familiar with and the word forensic may instantly bring to mind the image of a criminal investigation, which may seem a little odd when connected with accounting. But forensic literally means “relating to the application of scientific knowledge to a legal problem,” or “usable in a court of law.”
A Forensic Accountant might work with a business when fraud or embezzlement is suspected, or with government organizations like the FBI or CIA to resolve a crime. They are financial investigators who decipher complicated financial data such as business records, bank statements and tax return and prepare reports from this information that are more easily understood and can be used in court proceedings.
Forensic accounting is often used to help resolve a wide variety of legal disputes including bankruptcy and divorce proceedings, shareholder disagreements, business dissolutions, malpractice claims as well as fraud and embezzlement.
Benefits of a Forensic Accountant
- A forensic accountant can be very helpful in collecting evidence in court that may be used to assert a claim or settle a dispute between shareholders and partners or in medical malpractice suits, between the doctor and the patient.
- If employee fraud is suspected in your business, forensic accounting services are also beneficial.
- If your business is involved in any type of insurance claim, potential professional negligence or identity theft, engaging the services of a knowledgeable forensic accountant to assist in the investigation can be crucial.
Finding the Right Forensic Accountant
If your business needs the services of this type of accountant, it’s important to realize you can’t just choose any accountant. Choosing the wrong one may be like asking a cardiologist to perform brain surgery. A forensic accountant is typically not just a Certified Public Accountant with an accounting degree, but is a Certified Fraud Examiner. It’s important to be sure that qualified personnel have these designations.
The right accountant will have experience and skills that match the needs of your business and the case at hand, and because the forensic accountant’s work will typically result in giving evidence as an expert witness, it’s crucial that they are credible. The opposing counsel is designed to reveal any flaws in the accountant’s abilities, and there cannot be any question when it comes to their experience, skills, professional and personal background.