Let’s start with a definition: Forensic Accounting, sometimes called “Investigative Accounting,” is the practice of using accounting concepts and techniques to analyze legal problems. For example, a forensic accountant may be called in to investigate and document financial fraud or embezzlement. Other times, they may provide litigation support for attorneys and law enforcement in suspected financial wrongdoing cases.
Forensic accountants may also be utilized after fraud auditors uncover evidence of deceptive financial transactions and occasionally be asked to testify as expert witnesses in court. Businesses hire forensic accountants to investigate allegations of fraud against their employees, customers or suppliers. Lawyers consult with forensic accountants to obtain estimates of losses, damages and assets related to specific legal cases. This might include breaches of contract, product liability and shareholder disputes. Complex financial transactions often require analysis by forensic accountants to assess whether there has been any wrongdoing; price fixing or stock market manipulation, for example.
21 Reasons You Might Need a Forensic Accountant
- You’re thinking of selling your business and need an accurate valuation.
- You’re getting a divorce and suspect your mate might be hiding money somewhere.
- You notice missing products or equipment at your place of business and suspect your partner or an employee has been stealing.
- A wealthy relative has died, leaving you and your siblings a substantial amount of money and property.
- You believe a supplier has been over-charging you for products you buy from them.
- Your elderly parents will be moving into an assisted care facility, leaving their home, property and complex financial situation in jeopardy.
- You are thinking about buying an established business, but need to know the real story behind the financials the seller provided.
- You own a company that is facing a tax audit.
- You believe the manager running your store is squandering money.
- You need assistance dividing assets equitably and information on the tax implications for doing so.
- You discover something in a financial report that “doesn’t look right” and need some answers.
- Your mate believes he or she deserves more money when you split up because of unrealistic perceptions or incorrect beliefs regarding the true value of your business.
- Your shareholders have demanded a detailed analysis of multiple years of accounting records regarding compensation and benefits.
- You’re an attorney representing a party permanently injured in an industrial accident and need an assessment of economic losses, current and future.
- Your business burned to the ground and you need a detailed review of your insurance policy’s terms and conditions to ensure loss is calculated accurately and your case is settled properly.
- You suspect an employee might be earning extra money by selling your propriety corporate secrets to the competition.
- You think you’re being cheated out of royalties owed.
- All your paper records were stolen or damaged during a natural disaster.
- You suspect your bookkeeper of accounting malpractice.
- Your business partner was caught skimming money and you wonder how much more has been taken.
- You believe certain employees are working in collusion to divert money into their own accounts.
Do you need help with a forensic accounting issue? Have questions or concerns? Call McNair & Associates today at (702) 646-0888 for a free consultation. We have Certified Forensic Accountants on staff who are ready to assist you.