What is a Forensic Accountant?
Forensic accountants are certified public accountants who are specialists in unfolding any questionable or suspicious financial issues for businesses, nonprofits, governmental entities, and individuals using an accurate and investigative method of gathering financial data. They are usually asked to assist in searching for any facts that would justify any fraudulent activity that has taken place. Their field of expertise is often involved in bankruptcies, divorces, asset misappropriations, financial statement fraud, contract disputes, damage calculations, disputes in shareholders, and many corporate inquiries.
Forensic accountants are also needed by corporations, charities, municipalities to prevent any future experiences in fraudulent activities by conducting fraud risk assessments and evaluating and strengthening their internal control.
To become a forensic accountant, one should be a certified public accountant (CPA). CPAs will still undergo further education, training, and additional examinations. The American Institute for CPAs (AICPA) issues certification for Certified in Financial Forensics to CPAs who successfully completed all AICPA’s qualifying criteria. Aside from AICPA, there are also other accounting organizations that issue certification for financial accounting.
The importance of hiring a forensic accountant lies in court cases where a defendant has been erroneously charged, or when people or entities must prove a case. Forensic accountants provide litigation support to discover and prosecute financial crimes.
When should I hire a Forensic Accountant?
Consider the following reasons in hiring for a forensic accountant.
- Divorce and Marital assets. Finances can be complicated for couples with high net worth value . Especially if the couple is contemplating divorce, a lot of issues will be suddenly discovered such as complex and confusing financial records, obscure assets, far-flung real estate, and private investments. Hence, a forensic accountant is needed to look out for any marital accounts and financial statements.
- Mergers and Acquisitions. When a company merges or purchases another, it involves a great deal of financial analysis. Examining financial records by a forensic accountant will prevent possible fraud.
- Company Audits. Auditing by a forensic accountant will enable the discovery of financial irregularities that may be previously overlooked or dismissed. The methods used by a forensic accountant is not the same method used by a standard accountant’s audit and analysis. It involves deeper investigation into the financial and IT systems to determine any weaknesses that the company must address to avoid future problems.
- Contract disputes. The forensic accountant’s role in contract disputes will be the investigation of financial and other records to determine what is owed under the contracted agreement.
- Insurance claims. Recognizing the pattern of financial records and determining the true worth of a claim is the role of forensic accountants when dealing with insurance claims.
- Embezzlement cases. The possibility of fraud and theft is avoided if a forensic accountant will be asked to investigate especially if a thorough examination is needed that can’t be accomplished by a standard accountant.
- Litigation. Forensic accountants are trained to work with attorneys and law enforcement to investigate financial records that will help them to present evidence during litigation.
- Inheritance disputes. Forensic accountants can audit large estates so that minds of concerned parties will be put at rest.
Have Any Financial Questions?
Whether you’re looking for a forensic accountant, or someone to take care of any IRS issues, give our El Paso CPA firm a call and we’ll help you make the right choice for your financial goals! If you have any urgent questions please call (915) 775-1040
MARCUS, FAIRALL, BRISTOL + CO., PLLC
230 Thunderbird Dr Ste G, El Paso, TX 79912
Phone: (915) 775- 1040
Full-Service CPA Firm in El Paso