Forensic accounting information is the output of the investigative arm of accounting aimed at producing information that helps to resolve complaint, statement of claim, rumour, and inquiry or to reduce the financial element of legal debate. This is to say that forensic accountants are called in when an event has taken place and there is a reason or reasons to suspect foul play.
The duty of the forensic accountant is to seek for and obtain reasonable and appropriate financial evidence, interpret that evidence and then present them in appropriate format that will be admissible in the court of law. Just like the traditional accounting information system that has its users, forensic accounting information system has its set of users and that is the subject of this article.
WHO USES FORENSIC ACCOUNTING INFORMATION?
- CORPORATE INVESTIGATORS: rumours can damage the brand of a company when not investigated and managed. Forensic accountants serve as intermediaries between corporate investigators and individuals that are affected by the rumours with the aim of engaging in meaningful discussion that would produce appropriate evidence.
- INSURERS: both the insured and the insurers rely on forensic accountants to evaluate the integrity and the quantum of the amount involved in a claim. This is common in cases involving the calculation of losses arising from business losses, personal injuries claim and fidelity bonds. Because this kind of case often require the projection of cash flows, preparation, interpretation and analysis of financial details, the service of the forensic accountant is indispensable.
- CRIMINAL INVESTIGATORS: the information provided by accountants and auditors are considered as expert witness information that can be used in court when deciding on criminal matters like; investment scam, fraud, arson, stock market manipulation, etc.
- LITIGATION SUPPORTERS: lawyers working on litigations like bankruptcy proceedings heavily rely on the financial information supplied by the forensic accountants to serve as evidence of financial loss of a party or gain to another.
- GOVERNMENT AGENTS: governments bank on the services of forensic accountants to ensure that companies comply with relevant regulations and laws.
- PRIVATE INVESTIGATORS: private investigators employ the service of forensic accountant to provide credible evidence that can be tendered in a court of law.
If you a traditional accountant reading, you might wondering how on earth a finance professional like an accountant will be deeply involved into legal proceedings to this extent. Well, the truth is that all the skills, training and experiences that are needed to be a good forensic accountant are not picked up at once. However, there are basic skills you must possess as a forensic accountant. Just keep learning and believe that you will eventually get there.
You will have at this point appreciated that the importance of accounting is becoming more pervasive in nature as the day goes by. Decades ago, no one would have thought of accounting playing such an important role in the legal profession.