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Forensic Accounting In Practice Ronald Wimberly-EL Bagher Fardanes, Ph.D, MPA Business 508 May 19,2013
Running Head: Forensic Accounting In Practice Page 2 The five most important skills a forensic accountant should know are: Accounting, Auditing, Investigative, Evidence gathering, and Problem solving skills.[ The skills needed for Forensic Accounting,] by: Michelle Hickman. The Forensic Accountant investigates white collar crimes such as fraud, incorrect financial reporting, and illegal investment schemes. Forensic accounting is probably the fastest growing area of accounting today. “Forensic” means “suitable for use in a court of law”, and it is to that standard and potential outcome that forensic accountants generally have to work. Forensic accounting is the specialty practice area accountancy that utilizes accounting, auditing, and investigative skills to assist in legal matters. It encompasses- litigation support, investigation and dispute resolution. Litigation support represents the factual presentation of economic issues relating to existing or pending litigation. In this capacity, forensic accountants quantify damages sustained by parties involved in legal disputes and can assist in resolving disputes, even before they reach the courtroom. If a dispute reaches the courtroom, the forensic accountant may testify as an expert witness. Investigation is the act of determining whether criminal matters such as employee theft, securities fraud( including falsification of financial statements), identity theft, and insurance fraud have occurred. As part of the forensic accountant’s work, he or she may recommend actions that can be taken to minimize future risk of loss. Investigation may also occur in civil matters. For example, the forensic accountant may search for hidden assets in divorce cases. Forensic accountants may be involved in both litigation support( providing assistance on a given
Running Head: Forensic Accounting In Practice Page 3 case, primarily related to the calculation or estimation of economic damages and related issues), and investigative accounting( looking into illegal activities). Forensic accountants are needed for investigating mergers and acquisitions, in tax investigations, economic crime investigations, specialized audits and even terrorist investigations. Forensic accountants have play an important role in assisting the government as well as the public to detect accounting scandals and financial crimes caused by individuals, companies and organized crime networks. Unlike accountants and auditors, when forensic accountants conduct audits, they are actively looking for signs of fraud and they use their investigative skills to determine whether a business activity or a financial transaction is illegal. [What is Forensic Accounting and What does a Forensic Accountant Do?, by: J.J. Yong]. Hiring the right firm to provide expert financial analysis for commercial or matrimonial litigation is vital to developing a winning case. A successful litigation strategy depends on choosing the best forensic consultant to analyze and explain complex accounting, finance and valuation issues. Forensic accountants provide expert advice and testimony relating to the financial and tax aspects of litigation, including forensic accounting, data analysis during the discovery process, damage and lost income calculations, income tax issues, analysis of settlement offers. They also advise in the tax ramifications of various legal...
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