Forensic accounting involves the understanding of business information and financial reporting systems, along with accounting and auditing standards and procedures, and also gathering of evidence and investigative techniques in the litigation processes. It encompasses both litigation support, for example accounting of matters involving existing or pending lawsuits and investigative accounting. It is not only the utilization of accounting, auditing and investigative skills when performing an investigation but also the ability to respond spontaneously and communicate, in a clear and concise manner, the financial details in the courtroom.
Other terms that might be associated with forensic accounting are forensic investigations, forensic audit, internal audit and external audit. The basic duty of a financial accountant is examine, exemplify, synopsize and present intricate issues concerning finance and business in a manner, which is both apprehensible and properly supported. Most of the forensic accountants are engaged in public practices or hired by insurance companies, banks, police forces, government agencies and other institutions.
The role of a forensic accountant is to interrogate and examine financial evidence, develop computer applications that help in analysis and presentation of the evidences, putting forward all their findings in the form of reports, exhibits, and documents and finally taking part in lawsuits or litigations as an expert witness and testifying to the court with all the evidences acquired via documents or visual aids. It is crucial for a forensic accountant to be well versed with legal concepts and proceedings. The kind of projects assigned to a forensic accountant may vary from criminal investigations, shareholder's and partnership disputes, personal injury claims, other insurance claims, business or employee fraud investigations, matrimonial disputes, business economic losses, professional negligence and mediation and arbitration.
Relevant steps undertaken as a part of forensic accounting in general may involve meeting with the client first, then performing a conflict check, followed by the implementation of an initial investigation. Thereupon, the forensic accountant formulates an action plan, acquires all the necessary evidence that supports his investigation and performs a sequence of analysis of events thus finally presenting a detailed report on the same.
A forensic accountant should be characterized by a variety of aspects like curiosity, persistence, creativity, discretion, organization, confidence and sound professional judgment. These days forensic accountants are playing more proactive risk reduction roles by designing and undertaking extended maneuvers as a part of the statutory audit. They also act as advisors to audit committees, fraud deterrence engagements and assist in investment analyst research.
Thus forensic accounting involves looking beyond the numbers and grasping the substance of situations. It is more than just accounting and investigation; it's the perfect blend of these two. Forensic accounting will never go out of demand as long as mankind exists. Acquiring a career in forensic accounting not only guarantees stability and excitement but also huge financial rewards. Do you have what it takes?
Author Resource:
Terry Mickelson works with M. Martin Mercer. He offers experience in forensic accounting services to attorneys involved in business litigation. For more information about M. Martin Mercer visit http://www.b2bcfo.com/forensic_accounting/expert_witness.html or call (303)621.5825.Distributed by Content Crooner
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