Forensic accounting is the ability to analyze financial records and determine whether a company has been engaged in fraudulent activity. It can be used to uncover hidden financial trails that point to potential criminal activity, such as tax evasion or fraud.
What is Forensic Accounting?
Forensic Accounting is a specialized form of accounting that is used to reconstruct financial transactions in order to determine the truth of events. Forensic accountants use a variety of methods, including examination of bank records, interviewing witnesses, and reviewing documentation to piece together a precise picture of what happened.
The ultimate goal of forensic accounting is to provide justice for victims of financial crimes. By reconstructing the events leading up to a financial crisis or fraud, forensic accountants can help ensure that those responsible are held accountable.
Types of Forensics
Forensic accounting is the examination of financial records and data to reconstruct events, identify criminal activity, and seek restitution. Forensic accounting is used in a variety of legal proceedings, including criminal investigations, civil litigation, and bankruptcy proceedings. The various types of forensic accounting are as follows:
Financial Investigations: This type of forensic accounting is used by law enforcement to analyze financial records and data to determine the origin and ownership of money and assets.
Criminal Investigations: This type of forensic accounting is used by law enforcement to reconstruct events and identify criminal activity.
Civil litigation: This type of forensic accounting is used by lawyers to reconstruct events and identify damages caused by another party.
Bankruptcy Proceedings: This type of forensic accounting is used by lawyers to recover money owed to creditors.