By its basic definition, forensic accounting provides expert financial investigation and perspective. As a discipline, forensic accounting is dedicated to collecting and analyzing financial evidence. Forensic accounting services provide a basis for investigations into insurance claims for employee theft and dishonesty, cyber claims, and business income loss claims. Whether it takes the form of undertaking an intensive investigation or providing an expert interpretation, forensic accounting plays a key analytical role.
When insurance companies, businesses, or law enforcement suspect fraud has taken place, they bring those suspicions to a forensic accountant. Forensic accountants have been called the “bloodhounds” of the accounting world for their ability to follow leads and sniff out fraud.
To properly conduct these investigations, forensic accountants must have strong data handling, analysis, and visualization skills as well as professional skepticism and an eye for details.
Investigations require forensic accountants to gather and assemble data, examine the data down to the smallest details, and hunt for anomalies that could indicate fraud or wrongdoing. From there, forensic accountants must form a legally defensible, professional opinion as to whether fraud has occurred.
Alongside their investigative duties, forensic accountants are often called on to bring financial expertise to legal matters. This can take the form of providing expert testimony in the courtroom, assessing economic damages, and presenting an investigation’s findings. Forensic accountants even use their expertise to explain evidence and provide context for those without a background in accounting.
Despite being a relatively new discipline, forensic accountants have become a critical part of solving financial disputes as both investigators and expert consultants.