This post will look at what forensic accounting is, who forensic accountants are, the many forms of forensic accounting, and how much a forensic accountant makes.
Let’s begin with an explanation of what forensic accounting is.
What is forensic accounting?
The examination of fraud or financial manipulation by exceptionally detailed research and analysis of financial data is known as forensic accounting.
According to Investopedia, forensic accounting examines a person’s or company’s finances using accounting, auditing, investigative abilities, or skills.
As a forensic accountant, you are expected to look beyond a company’s numbers and into the company’s overall predicament. Forensic accounting is frequently used in judicial procedures to give appropriate accounting analyses.
Forensic accounting is frequently utilized in court to clarify the nature of a financial crime in fraud and embezzlement cases.
Forensic accounting is employed in cases where you must quantify losses in litigation support.
In this context, a review of financial data that you can utilize to support a court case is forensic accounting. Parties to legal disputes employ quantifications to aid in the resolution of conflicts through settlements of judicial judgments.
It could happen because of wage and benefit issues, for example. If the dispute goes to court, the forensic accountant could be called an expert witness.
Types of forensic accounting
Vendor fraud, often known as payment fraud, initiates or routes payments without authority.
Supplier fraud can be committed by those inside the company, such as employees, or outside the company, such as vendors. Supplier fraud follows a pattern that can be divided into three categories:
Sellers Acting Alone Fraud is a type of collection fraud involving the deceived firm’s suppliers and workers.
A sort of fraud committed by white-collar criminals is bankruptcy fraud. It is a legal procedure by which individuals or other entities unable to pay their debts seek relief from some or all their obligations. An insolvent’s legal condition is not confined to bankruptcy.
Investment fraud, also called securities fraud or stock market fraud, is a fraudulent strategy used in the stock or commodity markets to fool investors into making a purchase or sell decisions based on false information, which is illegal.
Financial identity theft
Financial identity theft is another sort of forensic accounting. It occurs when someone earns a financial profit by utilizing the personally identifiable information of another individual (PII).
When the buyer or seller of an insurance contract commits criminal conduct, it is known as insurance fraud.
Insurance fraud by the issuer includes:
- Selling policies from a non-existent company.
- Failing to submit premiums.
- Creating policies to collect more fees.
When a borrower fails to refund their debt due, it is called a default. The parameters agreed upon by the creditor and the borrower decide how long until a default occurs.
Some loans default after one missed payment, while others do not default until three or more installments have been omitted. Such an occurrence can have profound implications, such as a bad credit rating.
Computer forensics is a branch of digital forensics that deals with evidence gathered from computers and digital storage devices.
Its goal is to conduct forensic investigations into digital media to locate, preserve, retrieve, evaluate, and provide facts and insights into digital data.
Salary of a forensic accountant
According to the BLS, jobs for accountants, particularly forensic accountants, are predicted to expand by 6% between 2018 and 2028.
Furthermore, many states expect accounting jobs to increase even faster, with some anticipating growth rates of 20% or more.
The median forensic accountant salary in 2018 was $70,500. Forensic accountants frequently need a bachelor’s degree in accounting.
Employees’ job and income prospects improve when they specialize and gain suitable certification. Forensic accountants can become certified forensic examiners (CFE) or certified public accountants (CPA).
I hope that this post clearly defines forensic accounting and the work opportunities available in this field.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.