The Crucial Role of Forensic Accounting in Financial Investigations

Financial reporting misconduct is more common than you might realize. And yet, it can be difficult to explain and detail this type of fraudulent activity in front of a jury. Testifying in court without the assistance of a forensic accountant can be challenging, or even impossible. Sometimes, this type of fraudulent activity can be a mistake as opposed to a financial crime. It often takes the skills of a forensic accounting expert to detect the difference. And though you have certainly heard of financial crimes, perhaps you are less familiar with what forensic accounting is, or more importantly, why a forensic accounting consultant is necessary.

When it comes to testifying in court, a certified public accountant that specializes in fraud examination can provide overwhelming litigation support. In fact, forensic accounting is the only way to ensure that financial records have been thoroughly analyzed, deciphered, and conveyed. This field offers numerous forensic accounting career opportunities and forensic accounting positions for those interested in combining financial expertise with investigative skills.

Let’s break down how forensic accounting works, and what makes this field of financial forensics so important.

Forensic Accounting Consultant

Forensic accounting is a particular area of accounting finance. Specifically, this role involves accounting investigation into whether accounting firms, insurance companies, or other businesses engage in financial reporting misconduct or financial mismanagement.

Forensic accountants are CPAs who specialize in fraud examination. They are skilled in deciphering financial transactions and exploring fraud investigations on a deeper level. Essentially, the role of a forensic accountant is to review all types of financial information and transaction records. Once reviewed, this fraud investigator can provide expert testimony about any discovered financial behaviors, including hidden assets and fraudulent conveyances.

Forensic accountants need to be certified public accountants (CPA) through the American Institute of Certified Public Accountants (AICPA). Many also hold additional professional certifications such as Certified Fraud Examiner (CFE) or Certified Internal Auditor (CIA) to enhance their credibility and expertise.

Common Examples of How Forensic Accounting Works

Hiring a forensic accountant can be done for all sorts of reasons pertaining to accounting finances. However, some examples of financial crimes are more prevalent than others. Some such examples are tax evasion, money laundering, embezzlement, misappropriation of funds, check kiting schemes, fraudulent inducement, Ponzi schemes, and various forms of accounting fraud and corporate fraud.

These are terms you have certainly heard of, in addition to the larger notion of financial fraudulent activity as a whole. But did you know that the role of a forensic accounting consultant was created to help identify and address these types of crimes? In order to adequately and efficiently investigate financial fraud, one must be a CPA that is highly experienced in fraud examinations and well-versed in federal rules governing financial investigations. And this is precisely why a forensic accountant expert is so important.

There is a misconception that forensic accountants only testify in court or provide expert witness services into financial fraudulent activity. While these duties are certainly part of the role, they do not paint a complete picture of the forensic accounting career.

Hiring a forensic accountant can be done by a firm for any reason. For instance, a business might simply want help monitoring certain parts of its operations, or its operations as a whole. This might not be because there is any suspicious activity occurring. Perhaps the firm just wants a level of oversight into the financial transactions and reporting of the in-house accountants.

In this way, forensic accounting makes sure a firm’s financial records are accurate and there is no foul play. This can help a business with its overall finances, enabling it to remain accurate and compliant in ongoing financial reporting. Additionally, these services help a business navigate audits, lawsuits, allegations, litigation, and other legal proceedings with confidence.

Not Just Financial Crimes

The role of a forensic accountant is not merely to testify in court to prove fraudulent activity or financial crimes. Sure, this is an important part of accounting forensics, but not the entire slate of responsibility.

Certified fraud examiners can also ensure that accounting finance is done cleanly and that mistakes are addressed immediately. After all, any type of organization (or individual) is responsible for providing accurate and complete financial information, for taxes, business partners, shareholders, or otherwise. Forensic accounting consultants can both help prevent financial crime, as well as expose it.

Forensic accountants use various forensic accounting techniques, including financial modeling and analytical thinking, to uncover fraudulent transactions, asset misappropriation, and other forms of financial statement fraud. They are also involved in damage assessment and calculating economic damages in cases of business interruption losses or investment fraud.

Because of this range of specific skills and their ability to provide financial clarity, these CPAs with extensive experience in fraud detection and fraud prevention are in high demand. Their expertise is crucial in maintaining financial integrity and uncovering corporate scandals that might otherwise go unnoticed.

Let Joey Friedman Handle Your Forensic Accounting Needs

Hiring a forensic accountant is a smart move when it comes to certifying financial transactions as either fraudulent or not. And Joey Friedman knows the difference; he has a proven track record of successful fraud investigations and detection. Simply put, Joey Friedman is the CPA expert witness for the job.

Whether you need professional expert court testimony or a fraud examiner to investigate the books, Joey Friedman is your man. Not only that, but he gets the job done in a timely fashion, and to the satisfaction of the hiring parties. His attention to detail and extensive legal knowledge make him an invaluable asset in any financial dispute or bankruptcy proceeding.

Take your accounting finance needs seriously by letting Joey Friedman handle your forensic accounting needs. With his expertise in forensic accounting techniques and ability to provide evidence-based opinions on complex financial information, Joey can offer the financial clarity and expert witness services you need for successful resolution of financial disputes or litigation.