The most regularly asked question that has been posed to me since I moved into forensic accounting, from those who are not in professional services is, simply, what is forensic accounting?
There are a plethora of definitions but I think this quote (from David Malamed, a forensic accountant from Canada) is a great summary:
“While Forensic Accountants (“FAs”) usually do not provide opinions, the work performed and reports issued will often provide answers to the how, where, what, why and who. The FAs have and are continuing to evolve in terms of utilizing technology to assist in engagements to identify anomalies and inconsistencies. It is important to remember that it is not the Forensic Accountants that determine fraud, but instead the court.”
It is important to realise that a forensic accountant’s role is not to provide an opinion, as noted in the quote above, but to provide, most regularly in report form, a factual statement. Forensic accountants state facts in report form, to a standard acceptable to the court, often to assist corporate organisations or government agencies investigate a particular allegation that has been made or as part of the litigation process.
There are a number of specific areas in which forensic accountants often work. Ultimately, however, the work of a forensic accountant can be distilled into two types:
- litigation support; and
- investigative accounting.
Forensic accountants are also regularly called upon to provide pre-dispute advice to clients in the context of risk minimization and the deterrence of conduct.
Obviously, this type of work is fast paced and often intricate and that is why I so, already, enjoy it. In coming posts I will expand on some of the areas in which forensic accountants specialise as well as to explain the techniques used by forensic accountants to undertake the work that they do.
Postscript: If you have any questions or specific topics you would like me to cover as part of this series please do not hesitate to comment as part of this post or drop me an email at the address noted on the About page of this blog.