Forensic Accounting

What is Forensic Accounting

According to the Technical Working Group on Education in Fraud and Forensic Accounting, forensic accounting is the application of accounting principles, theories, and disciplines to facts or hypotheses at issue in a legal dispute, and encompasses every branch of accounting knowledge.

There are two major aspects within forensic accounting practice; litigation services that recognize the role of a Certified Public Accountant (CPA) as an expert or consultant and investigative services that make use of the CPA's skills, which may or may not lead to courtroom testimony.

Forensic accounting can involve the application of special skills in accounting, auditing, finance, quantitative methods, certain areas of the law and research, and investigative skills to collect, analyze, and evaluate evidential matter and to interpret and communicate findings.

Fraud Related Definitions

Fraud (sometimes referred to as the fraudulent act) is "an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing or to surrender a legal right; a false representation of a matter of fact." (Henry Campbell).

Fraud examination is a methodology for resolving fraud allegations from inception to disposition, including obtaining evidence, interviewing, writing reports and testifying.

Fraud investigation takes place when indicators of fraud, such asmissing cash or other evidence, suggest that a fraudulent act hasoccurred and requires investigation to determine the extent of thelosses and the identity of the perpetrator.

Fraud prevention refers to creating and maintaining environmentswhere the risk of a particular fraudulent activity is minimal andopportunity is eliminated.

Fraud deterrence refers to creating environments in which people are discouraged from committing fraud. Deterrence is usually accomplished through a variety of efforts associated with internal controls and ethics programs that create a workplace of integrity and encourage employees to report potential wrongdoing. Fraud deterrence can also be achieved through the use of continuous monitoring/auditing software tools.

Fraud remediation refers to the recovery of losses through insurance, the legal system or other means and the modification of operational processes and procedures, including changes to the system of internal control deemed necessary to minimize or deter a recurrence of similar fraud in the future.

Forensic Accounting Career Information

The following link relates to accountants and auditors in general but it will be still be of use to anyone considering a forensic accounting career. Topic areas covered include:

Public Accountants & Forensic Accounting

Work Environment

Education & Training

Licensure & Certification

Employment

Job Prospects

Earnings