The term, although widely used is seldom fully understood.  Forensic is defined as; “relating to, used in or connected with a court of law.”[1]  So then, Forensic Accounting is preparing accounting information for a court of law.  Typically this entails analyzing accounting data and preparing a report summarizing the results.  Not all cases make it to court; in fact cases most settle out of court.  The analysis we perform and the reports we prepare are often used in the negotiation of these out of court settlements.

Forensic Accountants are specially trained in this process.  Certificates in this specialty are awarded by the Association of Certified Fraud Examiners, (ACFE), and recently the American Institute of Certified Public Accountants, (AICPA).  Forensic Accountants are essentially auditors with a healthy dose of skepticism, and training in both law and evidence collection.

There is a similar skillset between a financial statement auditor and the forensic accountant.  However, the approach is very different.  The financial statement auditor’s goal is to gather enough evidence to issue an opinion on financial statements as a whole.  The forensic accountant needs a predication, or alternatively, a suspicion or an accusation as a starting point.  The forensic accountant then gathers sufficient evidence to either support or refute the predication.   This evidence and our report, is later used in a criminal proceeding, a civil proceeding for damages, or as mentioned previously, as leverage in settlement negotiations.

Types of cases we have worked on:

• Business divorce where one party accuses the other of unfair dealings for self-enrichment or fraud.
• Income reconstruction for a marital divorce case where one spouse owns a cash based business.
• An employment dispute where the employee was suspected of inflating the number of hours worked for compensation.
• A business dispute, where a utility customer accused the utility of overcharges.
• A fraud exam where an employee was accused of stealing from their employer.
• Representing an insurance company in defense of an overstated business loss claim.
• Assisting a Municipality whose employee was accused of theft.  As a result of our work the employee pled guilty and was sentenced to jail.
• Assisted a labor union whose President was accused of theft.  As a result of our work the President resigned.
• Assisting a Municipality whose employee was accused of theft.  As a result of our work the employee pled guilty and was sentenced to jail.
• Assisted a labor union whose president was accused of theft.  As a result of our work the president resigned.

At BKC, we have on staff personnel who have earned the Certified Fraud Examiner, (ACFE), and the Certified in Financial Forensics, (AICPA) certificates.  These same professionals have years of experience in working with the legal community in support of legal dispute resolution.

Learn more about our Litigation Support or Valuation services.

Read our Legal Services Blog here.

 

 

[1] http://www.dictionary.com/browse/forensic?s=t  November 4, 2016