The words “hot” and “accounting” are not usually found in the same sentence, but in a corporate world that is increasingly filled with brazen criminal behavior, forensic accounting is a hot job. Maybe we’ll see a slick CSI-type television program dedicated to these number crunchers!
In a nutshell, forensic accounting is the integration of auditing, accounting, and investigative skills in investigations into financial or economic matters.
Forensic accountants use accounting, auditing, and investigative skills to understand the nature of the financial transactions and how they are reflected within (or hidden from) financial records. They then summarize voluminous accounting records and detail and communicate this financial information clearly and concisely during the course of the investigation or when testifying in court.
Forensic accounting is important in both civil and criminal cases that involve accounting, auditing, financial, economic, and fraud issues.
In the civil arena, forensic accountants are frequently involved in helping counsel with complicated financial and accounting issues. For example, forensic accountants can be involved in evaluating claims in shareholder disputes relating to misstatements in financial reporting, or evaluating claims relating to accounting treatments in the acquired entity’s books and records in a postmerger or acquisition dispute.
Forensic accountants may become involved in criminal cases to evaluate whether inappropriate financial activity is occurring in a business. If it is, the forensic accountant documents the what, when, who, why, and how of the activity. A forensic accountant’s investigation may provide the basis for criminal charges in cases of complex fraud.
In 2002, US News & World Report named forensic accounting as a “career to count on.” Nothing has significantly changed in corporate culture since then to make this field any less bankable. In fact, it seems that there will be more and more ways to use these experts in both civil and criminal cases.
For more on the use of forensic accounting to identify evidence a crime, go to CEB’s Scientific Evidence in California Criminal Cases, chap 13. On the use of expert witnesses, including forensic accountants, turn to CEB’s California Expert Witness Guide. CEB also has a great new program, Forensic Accounting for Today’s Busiest Practice Areas.
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