Forensic Accounting Duties
- Examine Accounts
- Document Reports
- Analyze Data
- Run Forensic Investigation
- Prepare Forensic Reports for Court
There are many things forensic accountants do in the course of their workdays or while involved in cases. When describing a forensic accountant, the Forensic CPA Society states, “An external auditor is like a guard dog; an internal auditor a seeing-eye dog, and a forensic accountant is a bloodhound.” Forensic accountants’ main job is to use their investigative skills and accounting knowledge to find missing money, but they have many more responsibilities. Here are five things forensic accountants do as part of their jobs.
See our ranking of the 30 Top Affordable Master’s in Accounting / Master of Accountancy Degree Programs.
1. Examine Accounts
In most cases, the forensic accountant was hired for an anticipated dispute or litigation. The term forensic is synonymous with “suitable for court”, so forensic accountants must perform work to their highest standards. Whether a forensic accountant is doing routine work for an organization or is hired for a specific investigation, the first thing the forensic accountant will do is examine the company’s financial data and accounts. They then inspect and analyze the company’s assets and liabilities. Throughout their analysis, they ensure all financial records are consistent and accurate.
2. Document Reports
The forensic accountant’s documentation consists of four sequential steps: review, analyze, balance and document. Forensic accountants manage financial budgets, records, and systems. They go through and review the company or client’s financial books with a fine-tooth comb, analyzing and inspecting all profits and expenses. During this process, they also balance the financial books all the while looking for discrepancies. When they’re satisfied that they’ve completed all the steps and are satisfied with their final numbers, they write up a report on the company or client’s financial status.
3. Analyze Data
During this process, forensic accountants may perform interviews to verify and collect important information. The accountant also runs financial audits throughout the financial department and analyzes data from the financial systems, budgets, and records. A thorough review of the financial books is done at this time as well. During the analysis of data and financial records, forensic accountants identify pertinent information and find any discrepancies that may be there. The work forensic accountants can be very time-consuming and detailed because they’re constantly looking. Even if they feel they’ve covered one area, they may later find a discrepancy that can lead them to believe they missed some important detail in an earlier analysis. This creates the need to go back to inspect, analyze and review again.
4. Run Forensic Investigation
Towards the end of the forensic investigating process, forensic accountants must do a lot of the same work they’ve been doing from the beginning, particularly if a discrepancy was found. They carry out the forensic investigation by identifying all assets, determining they’re truly assets, tracing funds to their owners or origins and discovering irregularities. This is generally the final stage of a forensic accountant’s investigation before he or she presents it to the court system for litigation purposes.
5. Prepare Forensic Reports for Court
Prior to going to court, the forensic accountant gives everything a final once-over, looking for final discrepancies and preparing analytical data. Forensic accountants analyze the profit and loss of the company, prepare analytical data and balance the company’s books to prevent any possible fraud cases. Once all the reports are done, forensic accountants present their findings as court evidence and attend court as a witness if necessary.
The U.S. Bureau of Labor Statistics reports that accountants should see an employment growth of 10 percent during the 2016-2026 decade, but the increase in white collar crime puts forensic accountants even more in demand. With the many things a forensic accountant does, this should continue to be a rewarding and challenging career.
