Modern innovation and technology have given fraudsters a newfound sense of security. They believe that they can conceal their tracks and get away with crimes now more than ever before. However, this is not the case.
Tech savvy professionals with the appropriate expertise, like forensic accountants, can weed out these criminals and help to hold them accountable for their actions, and if possible regain stolen funds.
But while you might know they can help, you might be wondering, what does forensic accounting involve?
With fraudsters on the rise and being emboldened with each new piece of technology they can get their hands on, learn more about what forensic accountants can do to protect you.
Why Forensic Accounting is so Important
Fraud is the most common crime in the UK today. It costs the nation billions of pounds every year and can have a debilitating impact on people and company’s finances. Forensic accountants represent the most skilled professionals in their field, the front-line against protecting people and businesses from fraudulent activity thanks to their unmatched technology and training.
The role of a forensic accountant is to utilise their specialist expertise and state of the art equipment to protect you, your assets, and your money. In a constantly growing financial landscape with innovation always on the horizon, the importance of forensic accountants is growing year on year to assist against new-age, sophisticated fraud techniques.
While most major companies have an accountant in-house to monitor finances and protect them from fraudulent activity, innovation in technology and fraud mean that this is not always enough and businesses are finding themselves being caught out more and more.
The Functions of Forensic Accounting
The functions of forensic accounting are to find proof of financial crime, and to find appropriate evidence that can convict those responsible and protect the assets of those affected. Forensic accountants are not just responsible for finding evidence and proving financial crime happened. The prevention of financial crime is also a key function of the job of a forensic accountant.
They will stay abreast of any technological innovations in the industry and make sure to constantly be aware of new ways financial crime is cropping up around the world and find out how to protect clients from it.
Forensic accounting investigations usually follow a linear set of core steps from start to finish. While there may be more to each individual case, most jobs a forensic accountant will undertake will at least involve the following:
Investigate
Particularly relevant when fraud has already taken place. An investigation will entail the accountant collating evidence and data or interviewing staff in order to look for discrepancies and attempt to locate the source of any missing money.
Using all the information gathered, the accountant will formulate a hypothesis detailing the root-cause for financial loss as well as a plan for the next steps.
Report
At this stage the forensic accountant will begin to develop their case. They will present their findings to necessary persons of interest who are expected to use this information to work out who is the guilty party.
The accountant will suggest the next steps that the company should undertake and recommend ways to prevent such incidents from ever happening again in the future. After submitting the report, a forensic accountant will then begin preparation for the next stage.
Litigate
The final step in the job of any forensic accountant will be to participate in any court case stemming from the incident they worked on. They are there to act as an expert witness, to testify against the offending party.
At this stage they will explain in court any evidence they found in their investigation, as well as present any financial documents or any other evidence they used to draw their conclusion of the cause of the lost funds. The Forensic Accountant will need to utilise both facts and figures and also be able to present it to the court in a clear manner.
The 21st Century has seen an unprecedented rise in companies being created and hopeful entrepreneurs heading off into the business world looking to make a name for themselves. This increase in business owners with little knowledge means that the need for a forensic accountant has never been higher.
What do Forensic Accountants Look For?
The role of a forensic accountant requires them to look into the numbers, to meticulously analyse the facts and figures of a specific client/case in order to find any inconsistencies or irregularities. Forensic accountants are also required to have a detailed understanding of the law and how to apply it to a situation.
A selection of the sorts of things a forensic accountant may look for on a job include:
- Irregularities in finance (records, statements etc.)
- Criminal activity on the part of a director or any other employee in a business
- Money seeming to appear without a clear source
- Money seeming to disappear without a clear source
- Lax security within a business that could be exposed
- Suspicious statement in interviews conducted with employees
- Areas that could help balance the books in case fraud does hit
Any and all of these examples could point towards fraud being committed from within or by a third party, or act as a way for the business to better protect itself against such an eventuality.
Inquesta: One of the UK’s Leading Forensic Accounting Firms
Inquesta has been providing clients with expert forensic accounting services for decades and has built a sterling reputation as one of the top firms in the country.
Our dedicated team of forensic accountants guarantee that they will leave no stone unturned and no file unread in the hunt for answers and to get you the best result possible.
With experts in the field who have seen it all and done it all when it comes to forensic accountancy, they know what to look for, and how to guide you through what can be a difficult time.
The Inquesta team specialises in providing an excellent forensic accountancy service that is designed to help keep you and your business safe. For further support and information on what Inquesta can do to help, contact our team today or request a free consultation.