In our Previous accounting article on the Meaning & Functions of Forensic Accountants, we analyzed some critical functions of Forensic Accountants. Now you will learn about some parties who badly need forensic accountants.
As you know day by day the functions and business procedures are getting tough and complex. Sometimes the business enterprise or its environment could be affected by some fraud which makes the environment controversial and litigious. For this reason, the necessity and appearance of forensic accountants become compulsory in the business enterprise. Therefore the increased business complications of any controversial environment have enhanced the need for forensic accountants. In which areas forensic accountants are basically needed or where they are establishing their career are described below:
Corporate investigations: Companies respond to those concerns that take place from a number of sources .these apprehensions suggest or aware the business that some possible unlawful activities could generate from both within and outside the business environment. The illegal actions and activities should be addressed rapidly and efficiently in order to achieve the organizational goal by performing the business procedures and functions. And to do so the appearance of any forensic accountant is considered as one of the best medicine for any company.
The forensic accountant could play a significant role in recognizing the allegation and assertions. These allegations are generally ranging from kickbacks and unfair notices to internal situations of the company including allegations of management or offensive behavior of any employee. A forensic accountant can take interviews or communicate with those persons who are affected by the accusations, or any rumors or inquiries and will try to make the people or the business environment free from these allegations. Forensic accountants also investigate for fraud in the company which could be solely responsible for creating a corrupted environment in the business. Therefore many accounting firms or corporations employ forensic accountants to reveal the truth and to investigate fraud.
Litigation support: Litigation support means providing support in case of legal actions. A forensic accountant has proved an effective medium for providing litigation support. These forensic accountants are assigned to give litigation support for detecting financial frauds, asset division, and child support in divorce cases, mergers and acquisitions, and securities frauds. Forensic accountants also assist in counseling that is related to the investigation and evaluate the reliability and amount relating to such areas as loss of profits, construction claims, product liability, shareholder disputes, bankruptcies, and breach of contract. But of course, litigation support is generally instigated by an attorney to respond to the legal action, whether it is criminal or civil. So some large law firms or attorneys have their own forensic accountants as their investigative staff. These forensic accountants are assigned to give support cases involving financial frauds, asset division, and child support in divorce cases, mergers and acquisitions, securities frauds, and other types of cases
Criminal matters: the accountants and auditors are consistently used by the companies to prevent professional crime as they are capable to reduce the illegal activities from the business. Retail companies appoint forensic accountants in order to reduce the theft or stealing of business products from consumers and employees by establishing some audit policies and procedures. There also could be the existence of some other criminal matters or fraud such as scams, fraud vendor frauds, customer frauds, investment scams, and stock market manipulations. In these criminal matters, forensic accountants work as expert witnesses and their appearance are becoming important in court cases.
Insurance claims: The Insurance companies employ forensic accountants to examine the fraud in applications for life insurance as well as false claims on workers™ reimbursement and death benefits. The preparation and the procedures of the insurance companies need to evaluate and investigate regularly in order to find the truthfulness and quantum of an insurance claim. For this reason, insurance companies require the assistance of a forensic accountant in order to assess the verification of the claims. The insurance claims are basically arising from business interruption, fidelity bond, and personal injury matters. Forensic accountants will analyze and inspect the allegations.
Government /Regulation /Compliance: Forensic accountants can assist business entities to acquire regulatory and contractual conformity. Forensic accountants provide assurance to the companies that the companies can follow the appropriate legislation, law, or contract terms. Forensic accountants work for the government to contribute and provide financial backing to investigations and public inquiries. The federal government is the largest organization that appoints forensic accountants. Traditionally, the Federal Bureau of Investigation (FBI) investigated fraud. In recent years many federal agencies also have their own Office of the Inspector General (OIG) that investigates financial crimes and frauds particular to that agency™s mission.
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