Forensic accounting
is the exercise of employing accounting, auditing, and investigatory
accounting skills to aid in judicial proceedings. Forensic literally
stands for "used in a court of law" or for "public debate". When
we combine accounting skills with legal knowledge, it is called
forensic accounting.
A
Brief History of Forensic Accounting
Accountants have been
employing their investigatory skills nearly since the dawn of time.
Some of the oldest accounting records date back over 7,000 years
to old Babylon, Assyria and Samaria where accounting was employed
to track agriculture. Probably, even back then, folks were worried
about not getting short-changed in their business and financial
lives.
Modern forensic accounting has got its earliest reference in 1824 in an accountant's advertisement broadsheet in Glasgow, Scotland. Special accountants made testimony in court and in arbitration proceedings. Interest in forensic accounting spread out through the United States and England early on in the 20th century. Among the first institutions to employ the services of investigative accountants was the IRS. The account of Alphonse Capone the famous gangster being arrested on a tax dodging scheme is long-familiar. Of course even nowadays, the Internal Revenue Service continues to employ forensic accountants in pursuing tax cheaters amongst business sector executives, sports and entertainment celebrities including Woody Nelson, Nicholas Cage, and Wesley Snipes.
As a profession, forensic accounting kept growing during the latter half of the twentieth century, until now, when virtually no winning business litigation claims are made without the aid of a forensic accountant.
Modern Forensic Accounting
Modern forensic accounting centers on 3 main areas: litigation support,
forensic accounting investigation, and dispute resolution.
Litigation
Support
Commercial litigation
support constitutes the presentation of financial issues related
to existing or pending legal proceeding. The forensic accounting
professional determines damages suffered by parties involved
in judicial disputes and can assist in solving disputes, even
before they reach the courtroom. If a dispute gets to the
court, the forensic accountant can] testify as an expert witness.
Forensic
Accounting Investigation
Forensic accounting
investigation is the process of deciding whether criminal
matters such as internal employee theft, securities fraud
(including falsifying of financial statements), identity theft,
and insurance fraud have happened. As part of the forensic
accountant's work, they may advocate actions that can be taken
to minimize future risk of loss. Forensic accounting investigation
may likewise occur in civil disputes. For example, the forensic
accountant could hunt for hidden assets in divorce cases.
Forensic accounting requires probing beyond the numbers and
seizing the essence of situations. It is more than accounting...more
than detective work...it is a combination. Concisely, forensic
accounting demands the most crucial quality a person can possess:
the power to think.
I started my accounting career with Price Waterhouse Coopers
as a forensic accountant reviewing and investigating financial
statements of many of the world's largest corporations. As
a forensic accountant, I have nearly 30 years of experience,
and I know that my expertise can unquestionably assist you
with your investigatory inquiry for your personal or corporate
accounting needs.
Call us today at 713-661-1040 and allow me to put our forensic accounting experience to work for you.
