Forensic accounting is a specialized field of accounting that combines accounting, auditing, and investigative skills to examine financial records and transactions. The primary goal is to uncover and analyse financial discrepancies, fraud, and other financial crimes. Here’s a detailed look at forensic accounting:
Key Functions of Forensic Accounting
Fraud Detection and Investigation: Forensic accountants investigate financial fraud, including embezzlement, securities fraud, and insurance fraud. They analyse financial records to identify irregularities and gather evidence.
Litigation Support: Forensic accountants provide support in legal cases by quantifying damages, tracing assets, and preparing financial evidence. They often serve as expert witnesses in court, explaining complex financial issues to judges and juries.
Asset Tracing and Recovery: They trace the movement of funds and identify hidden assets, which is crucial in cases of divorce, bankruptcy, and corporate disputes.
Due Diligence Reviews: Forensic accountants conduct thorough reviews of financial records during mergers and acquisitions to ensure there are no hidden liabilities or fraudulent activities.
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