With the ever-changing, ever-evolving modern world comes progress and discovery. But with each new technological innovation comes some way for a person to try to fraudulently use it to their advantage.
Studies have shown that since the beginning of the COVID-19 pandemic in 2020, online fraud has become more prominent. 76% of all the business owners in the study felt that they had been more exposed to fraud since the pandemic, more than 25% said they had suffered a security breach, and over half of the mid-sized business owners asked had been hit by fraud at some point during 2020.
With fraudsters seemingly on the rise and your money being more at risk than ever, what options do you have to protect yourself? Well this might be where you have heard about a forensic accountant, perhaps in passing conversation, at a business meeting, or on the television.
But what does a forensic accountant do exactly, what can they help you with, and what role can they play in protecting your finances.
What is Forensic Accounting?
Before answering ‘what does a forensic accountant do’, it may be handy to go over what forensic accounting actually is. Forensic accounting is the process of investigating the finances of an individual or business. Trained specifically to not only look at the numbers, but also the surrounding situation of a business/individual, these specialist accountants provide an accurate level of accounting that is often used in legal proceedings on financial crimes.
It is, in essence, a combination of a traditional accountant and a financial investigator. In most cases a forensic accountant will be a highly qualified and experienced accountant/auditor who will combine their pre-existing expertise with new skills learnt in further formal training to specialise in forensic accounting.
The Role of a Forensic Accountant
Typically, a forensic accountant is brought in to investigate the finances of a person or business in order to provide expert assistance in a litigation.
Their work is extremely complex and generally they will only be called out for the most complicated jobs as a result.
Unlike an auditor, the role of a forensic accountant will be more unique, there is no obvious step-by-step system to follow. It is a more flexible role that requires somebody to be able to pivot to a new approach or angle whenever needed.
What Makes a Good Forensic Accountant?
Being a forensic accountant is about more than just being good with money. There are multiple attributes, skills, and credentials that go into the role such as:
Due to the necessity to work collaboratively with others, the role of a forensic accountant requires excellent interpersonal skills. During the course of their job they will be working closely with clients and outside counsel; they will frequently conduct face-to-face interviews, and will need to create in-depth reports to provide evidence of everything they do.
Due to the complicated nature of their investigations, it is important that a forensic accountant is able to plainly and concisely explain their findings with authority and clarity.
The sheer amount of financial data a forensic accountant is faced with on a day-to-day basis means that they will need to be able to take great care, and have meticulous attention in order to detail and identify any clear anomalies in the findings.
They will also need to be skilled data analysts and collectors, who are capable of assessing collated data and contextualising it to find evidence that will support their hypothesis and findings.
A good forensic accountant will usually have started out as an accountant or auditor, having likely achieved their Association of Accounting Technicians (AAT) qualification, or alternative foundation financial diplomas.
Once achieving some form of certification, they will then proceed to the professional standard qualifications for their roles, such as ACCA, or CIMA. This will allow them to gain a professional position as an accountant, analyst, or auditor, and from there, after gaining the appropriate amount of experience, they will be suitable to convert to forensic accounting.
Key Areas of Work for Forensic Accountants
The work of a forensic accountant can be highly varied and involve a variety of different practices day-to-day. Forensic accountants can be drafted in to help with nearly any financial or tax issue, and provide an independent view, to offer impartial, expert assistance.
The key areas of work for forensic accountants are:
A forensic accountant can be contacted to give a specialist opinion on a financial matter in court in a situation where a financial crime is believed to have taken place. Examples of criminal cases a forensic accountant could be contacted to assist with are:
- Financial Misinformation
- Suspected Fraud
- Financial crime such as money laundering
- And more
Family lawyers may wish to seek the expertise of a forensic accountant, particularly when it comes to matrimonial disputes stemming from assessing earnings and valuing complicated shared assets in the event of a divorce.
The main role a forensic accountant can have in divorce matters is to guarantee total financial transparency for both parties. Their aim is to identify and investigate any possible discrepancies, and attempt to ascertain if there are any hidden assets on either side.
Business disagreements can be complicated and often convoluted processes. This is why the services of a forensic accountant can often be required. Commercial situations that could require a forensic accountant are as follows:
- Disputes between shareholders
- Breaches of contract
- Business valuation
- Misappropriation of funds
A forensic accountant may be contacted to assess the loss of earnings in an insurance related matter.
Why You Can Rely on Inquesta
Inquesta has experience providing our clients with expert forensic accounting services – from marital issues, to personal injuries, to commercial disputes. We understand that no two cases are the same, this is why we go into everything with a fresh mindset.
Our expert team will leave no stone unturned, they are specialists at providing guidance, support, and deep dives into the numbers and finances in any situation.
Able to offer an all-encompassing service, we aim to always put the needs of our clients above all else and get you the best result possible.
The Inquesta team specialises in providing top-rate services in all areas of forensic accounting. For further support and information on what Inquesta can do to help, contact our team today or request a free consultation.