Corporations are often the victims of the most common white-collar crimes that occur in corporate America. According to the Association of Certified Fraud Examiners (cfenet.com), “abuse and fraud by employees cost U.S. organizations more than $400 billion annually…[which equals] $9 per employee per day.”
These statistics show the corporate need for forensic accountants, there also is an immense demand for these specialized accountants in the private sector. For example a forensic accountant is used to “quantify economic loss” (askhal.com) in personal injury cases.
forensic accounting is “ an accounting analysis that is suitable to the court, which will form the basis for discussion, debate and ultimately dispute resolution.” (forensicaccounting.com) According to Hal Rosenthal, a certified forensic accountant, it is the “use of intelligence gathering techniques, accounting and business skills to develop information and opinions for use by attorneys involved in civil litigation and to give trial testimony if called upon.” (askhal.com) In other words, a forensic accountant checks an organization in case of a dispute, to see if any money discrepancies are present.
The Term Paper on Forensic Accounting: Assignment
ZZZZ Best had started operations in the year of 1982 as a small, door-to-door carpet cleaning operation. A sixteen-year-old young talented entrepreneur, Barry Minkow who is the founder of the company, initially runs it out of his parents’ garage. ZZZZ Best experienced tremendous growth in both revenues and profits during the first several years of its existence. During the period from 1984 to ...
Forensic accountants can be critical in providing litigation support. litigation support is the “assistance of an accounting nature in a matter involving existing or pending litigation.” (Philadelphia Business Journal, p.18)
This type of support is often determining the amount of monetary damages.
Another aspect of forensic accounting is investigative accounting. This is the investigation of criminal matters, securities fraud, and kickbacks. For example, if an a person was laundering money, the forensic accountant would investigate how money was obtained and the process of how it was made into “clean” money.
Another key function of forensic accounting is forensic auditing. According to cfenet.com, it is the “examination of evidence regarding an assertion to determine its correspondence to established criteria carried out in a manner suitable to the court.” Audits are an essential way of evaluating an organization’s financial records. For example the government regularly performs an audit of a person’s income statements to determine the amount of taxes owed.
There are two forms of auditing: internal and external. People within the organization execute an internal audit. An external audit is carried out by an outside organization like a C.P.A. firm.
A specialized accountant’s main duty is to “analyze, interpret, summarize, and present complex financial and business related issues in a manner that is both understandable and properly supported.” (Business Courier)
They are commonly engaged in public practices, or in insurance companies, banks, police departments and other government agencies.
Accountants must have a good deal of experience working with computers. They develop computer applications to assist the analysis and presentation of their findings. Due to the e-commerce explosion, a majority of financial records are now web-related.
Forensic accountants often find themselves in court as experts in the field. Lawyers utilize accountants to assist in interpreting evidence at a trial. “A forensic accountant must be familiar with legal concepts and procedures, they must be able to identify substance over form.” (askhal.com)
The Term Paper on Techniques used by management accountant and usefulness of management accounting information in the public sector
According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises ...
Forensic accountant’s role in investigations is to provide police and district attorneys with assistance. According to financialaccounting.com, accountants assist with the protection and recovery of assets, and coordinate people such as private investigators, forensic document examiners, and consulting engineers. Accountants also provide valuable insight into course of action for the chief investigators.
Accountants are used to support attorneys in obtaining information to support or refute a claim. They also review the information available to make an initial assessment of the case and also to identify the loss.
“Forensic accountants’ key utilization in litigation support is during the “Examination for Discovery.” Accountants formulate questions to be asked regarding the financial evidence…[they] also review testimony, assist with the understanding of financial issues and formulate additional question to be asked.” (Philadelphia Business Journal) Accountants also provide help to attorneys in settlement discussions and negotiations.
In criminal investigations, accountants are expected to analyze and present the financial evidence on the behalf of the police force. “Often forensic accountants are the ones who can nail the suspect.” (cfenet.com)
In today’s corporate culture accountants are often involved in a detailed analysis of numerous years of accounting records. For example, Hal Rosenthal describes a case between disputing shareholders who are at odds over compensation and benefits received. The financials records that have to be examined can cover anywhere from months to decades.
In personal injury lawsuits a forensic accountant is often retained to “quantify the economic loss arising form a motor vehicle accident.”(Philadelphia Business Journal) An accountant would also be used to determine the amount of compensation stemming form the case.
In insurance cases forensic accountant have a variety of duties. Insurance policies are often varying and full of certain clauses that create unique circumstances. ”Forensic accountants’ main priorities with insurance litigation involve review of policy and calculating loss through a prescribed methodology.” (cfenet.com)
The Business plan on Cash Flow Financial Information Business
The financial statements are suggested as the intermediate component between the reporting entity and report users in the reporting process. The major objective is argued as to provide useful information about the reporting entity'I 1/4 financial performance and financial position to a wide range of users. Thus they can make economic decisions as well as assess the stewardship of the entity'I 1/4 ...
Forensic accountants also consult on arguments such as matrimonial disputes, business economic losses, professional negligence, loss quantification, mediation, and arbitration.
With the “average organization losing 6% of its total yearly revenue by its own employees,” (cfenet.com) forensic accountants are needed to investigate and protect companies. These special types of accountants are utilized in every dispute that involves money. There is an incredible need for forensic accountants according to the Philadelphia Business Journal. In fact, they named forensic accounting as one the “hot 10 jobs in the accounting field.”
