One of the newly recognised forms of accounting jobs is forensic accounting. A forensic accountant is an internal or external auditor hired to look at a case of fraud, bankruptcy, or other legal issues. He or she examines the case and draws a conclusion about the wrongdoings and the amount of money lost. The auditor writes a study that is often used as evidence in court. The forensic accountant can also be called to testify in person.Kindly visit Jones CPA Group to find more information.
The large number of scandals wreaking havoc in the corporate world in recent years has given rise to forensic accounting. Many owners and workers suffered significant losses as a result of Enron and WorldCom. The accounting profession heeded the warning and has made many mid-course changes to ensure that such crimes do not occur in the future.
PROJECTS IN COMMON
Forensic accounting is a form of auditing that is more advanced. The SEC or the company itself may require regular audits to ensure compliance with accounting standards or company policies and procedures.
In the other hand, forensic audits are carried out when anything occurs that requires further investigation. It isn’t something that happens on a regular basis. Here are several examples of initiatives that may benefit from forensic auditing:
Insurance brokers are an excellent and common example of agent fraud. An insurance provider has a lot of access to his customers’ personal details. A typical fraud scheme involves an insurance agent falsifying an application for a loan on a customer’s insurance policy. The proceeds of the loan are held by the agent, and the customer may be unaware of it for months or even years.
Insurance and personal injury lawsuits – Often people deceive insurance providers by making false claims. This is yet another important field where forensic accounting techniques are needed.
Construction audits – Forensic accounting is used to ensure that the construction is completed with the quality of components specified.
Royalty audits – In any case where a worker, normally an artist, is owed royalties for the display or airing of his work, a forensic accountant is often called in to ensure that he is being paid what he is owed.
SEC inspections – Wall Street scandals abound these days, and forensic accountants help track down the wrongdoers by analysing financial data.
Divorce settlements also employ the services of a forensic accountant to ensure that all parties receive a reasonable settlement.
More than an accounting degree is expected to be effective in forensic accounting. Other than just his spreadsheet and accounting skills are used by the forensic accountant. He or she must be ready and capable of dealing with the entirety of the investigation’s business situation. This entails reviewing financial data, publishing it in a variety of conventional and technological formats, and perhaps even appearing in court. All delivered documents must be in a format that can be used as evidence in court. As a result, the forensic accountant must be well-versed in legal jargon and procedures.
In addition to being a competent public speaker, the forensic accountant must also be a good journalist. In order to persuade the court of the facts he has found, he must be confident and articulate.