What is a Forensic Accountant?
diamondcpas
March 15, 2018

The TV series CSI popularized the field of forensics. CSI made the use of science in criminal investigations seem exciting, maybe even a little glamorous. While nobody is rushing out to make a TV show about forensic accounting (yet), the field is no less interesting.

Forensic accounting sits at the intersection of business, finance, auditing, investigation and the law. It is a specialty practice of accounting, often required for actual or potential disputes or legal actions. Frequently used in cases of fraud, malpractice, identity theft, and lawsuits, forensic accounting is a deep-dive into the numbers and data of the situation.

Here are a few areas in which the unique combination of skills possessed by a forensic accountant can be useful and helpful:

Small Business
For owners of small businesses, the expertise of a forensic accountant can be useful in multiple scenarios, including disputes regarding contracts, business partnerships, complex tax situations, and investigations of financial irregularities. Small business owners can find themselves at particular risk of fraud, theft, and misappropriation of funds due to an environment with an assumption of trust and lack of processes and controls. A careful review by a forensic accountant can ensure that everything is running smoothly and fairly, and can help devise a system of controls to protect the business in the future.

Lawsuits
Forensic accountants are often used in lawsuits involving medical malpractice, negligence, or fault. They are frequently called upon as expert witnesses in court to testify and quantify losses and damages. For example, in a case of medical malpractice, the forensic accountants would review insurance policies, coverages, losses, income, and future expenses.

Personal
In personal matters, forensic accountants can be used in divorce cases to sort out complex financial matters, verify income and assets, and sometimes testify in court. With their specialized set of skills, forensic accountants can often sort through this type of information faster, and for less money, than a lawyer or law office.

They say the “numbers don’t lie” and a forensic accountant works as proof of that concept. With their broad range of skills and knowledge, forensic accountants can uncover inconsistencies and help provide clarity and straightforward answers to complex financial matters.

0 Comments

Recent Posts

Crypto Taxation Update

Crypto Taxation Update

The landscape of cryptocurrency taxation has recently seen notable developments, notably with the IRS Revenue Ruling 2023-14 shedding light on the treatment of rewards accrued from staking cryptocurrency. For those acquainted with the intricate world of digital asset...

Unlocking the Benefits: Exploring Electric Vehicle Tax Credits

Unlocking the Benefits: Exploring Electric Vehicle Tax Credits

Are you considering making the switch to an electric vehicle (EV)? The roads are abuzz with the surge in EV popularity, and for good reason. In this article, we’re diving into the world of electric vehicles and the tax credits that come with them. Let’s uncover the...

When You Might Not Need A Trust

When You Might Not Need A Trust

When it comes to estate planning, trusts are often employed to transfer wealth to the next generation. Trusts can provide numerous benefits, including asset protection, privacy, and control over the distribution of assets.  There are plenty of circumstances when  a...

QUESTIONS?

Reach out for a consultation.

Diamond & Associates CPAs