What is forensic Accounting (Part-1)

Many People wonder what is forensic accounting, what do forensic accountants do,how to get forensic accounting degrees,how and where to join’ forensic accounting course etc.

In fact, the word forensic is basically referred as belonging to, used in, or suitable to courts of judicature or to public discussions and debate. In the accounting world, forensic accounting means the complete analysis of fraud investigation. Accordingly, in the accounting profession the term forensic deals with the relation and appliance of financial facts with the legal problems, forensic accounting evidence, which makes it oriented to a court of law. Forensic accounting basically works for preventing frauds and analyzing anti fraud controls in the company.

Forensic Accounting also involves with the audit of accounting records in order to search for evidence of fraud which is referred as a fraud audit.’ Fraud investigation also deals with the congregation of non financial information. For example, information about taking interviews of all parties that is related to a fraud, if it is relevant. Beside Fraud investigation, Forensic accounting perform other significant responsibilities such as, writing or providing a report to the management or court, serving as an expert witness and litigation support.’

There are some terms that are related with the forensic accounting such as, fraud auditing, forensic accounting, fraud examination, fraud investigation, investigative accounting, litigation support, and valuation analysis. But all of the terms are not clearly defined or analyzed in the dictionary of accounting. There is a deference prevail between fraud auditing and forensic accounting. Fraud auditing refers a specialized approach and methodology to detect fraud that means by helping these methods the auditor search for some evidence to detect fraud.The purpose of this function is to prove or disprove an existence of fraud. That’s why like investigators, forensic accountants are also called in after getting any evidence or suspicion of fraud through complaint or discovery.

The latest statistics show that $2.9 trillion is lost every year due to fraud, so forensic accountants can really help investors and shareholders to scape from frauds. Many people have misconception that forensic accounting is a brand new concept. But “Forensic Accounting” as a profession has already passed more than 2 decades. Forensic Accounting course is not very common but recently many universities and colleges include this course in part of their course curriculum. Besides universities,’ some well reputed organizations such as the Association of Certified Fraud Examiners (ACFE) and the American Institute of Certified Public Accountants (AICPA) now offer designations in fraud examination and forensics which helps lot of accountants to turn their general accounting career in this specified field.

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