Ans :
Forensic Accounting is an art of investigation over accounting records, financial
statements, and other related financial records. The result of the investigation is
mostly used for legal support and resolving conflict. This job requires technical skills
in accounting, investigation, and legal. These are what drive forensic accounting to
become more attractive and highly paid. The investigation covers certain areas,
including Fraud, crime, insurance claims, and disputes among shareholders. Forensic
Accounting involves the following steps:
i) Investigation: Forensic accountants typically begin an investigation and collect
evidence when fraud suspicions already exist. Because of this, the data they
look for when conducting an investigation include red flags and discrepancies
that might indicate fraud has taken place. They may interview staff at an
organization to gain more information and attempt to find the individual
behind the fraud. Using the gathered information they begin to form a
hypothesis as to what happened and create follow-up plans to continue to
assess the business. Once this step reaches completion, the forensic accountant
determines the next necessary action and relays this information to the
company.
ii) Reporting: Once forensic accounting professionals gather information/data and
develop a case, they present a summary of their findings to necessary
personnel. Using this information, these workers determine how the fraud
occurred and who played a role. Then, the accountant determines how to
handle the case and suggests steps the company should take next. In addition,
they may recommend ways to prevent these incidents in the future by
increasing/strengthening internal security and pointing out red flags.
iii) Litigation: The final step of a forensic accountant’s process involves participation
as an expert witness in the incident’s court case. The professional presents
their findings as evidence in court and testifies against the offenders. They
explain any evidence and interpret financial documents in understandable
terms, presenting how they identified the subject. This means that the
accountant must not only find evidence but also use rhetoric that makes sense
to the court. Once this step reaches completion, the court determines the final
decision for the situation. The forensic accountant plays an important role
throughout this process.
