How Do Forensic Accountants Help Solve Crime

Friday, August 31, 2012

How Do Forensic Accountants Help Solve Crime

Forensic accountants are often involved in the underworld of crime and espionage and are vastly different from the pencil pushers that most people picture. Forensic is a term that actually means something that is suitable for the law, and an accountant may undertake special training to learn the techniques that are suitable for expert testimony in a court of law. Forensic accountants are essential for some legal cases because they investigate money-laundering and locate funds around the world. Some universities offer a Master's Degree in forensic accounting, and this is one way to enter the career. 

What do you mean by forensic accountant?

Accounting is a broad range of jobs, and there are a number of specialties within the larger set. Forensic accountants work with cases that involve legal issues. They undergo the same training and education as a traditional Certified Public Accountant (CPA), but they also further their career with additional coursework and practical experience. Forensic accountants are vital in criminal cases, and the Federal Bureau of Investigations (FBI) is just one employer. 

Investigating Money-Laundering

Because accountants have the knowledge of modern bookkeeping, they are often called in to search for missing money. Many crimes involve money-laundering, and the FBI hires forensic accountants to track down missing funds and determine the aspects of a crime. Forensic accountants usually have to travel, and may fly around the world. One of the most notorious gangsters in the history of the United States was actually convicted based on the principles of forensic accounting. Al Capone was finally found guilty on charges that were the result of investigations into his income tax filings.

Investigation, Auditing and Accounting

Forensic accountants use their skills to audit and investigate financial records of people and corporations. Most professionals routinely work in one of two major areas: litigation support and investigation.

Litigation Support

Litigation support is one area where forensic accountants are required. In this type of approach, clients rely on their accountant to minimize the time and costs that are associated with a trial. Accountants figure out the financial damages of a particular problem, and are essential in the mediation process. Preventing theft is another job that corporate accountants may work with. Finding ways to reduce securities and insurance fraud is the responsibility of a forensic accountant in a corporate setting.

Accountants are required to apply their auditing skills to find missing or laundered money. Professionals may work for governmental investigative agencies, or have their own private practice. The leading corporations also routinely hire forensic accountants for their investigative skills. In the corporate sphere, accountants help companies create systems that proactively prevent theft. 

Embezzlement is a major concern in the world of business, and accountants also find money that is stolen from a corporation. Divorces are a common legal situation that may require the services of an experienced forensic accountant. Because there is a financial settlement in most divorce proceedings, an investigative accountant may be needed to locate funds, determine a spouse's net worth and determine alimony payments.

Forensic accountants serve a vital investigative function. The professionals may be employed by the FBI or other investigative agency. Because tracking down money is an essential component of most investigations, the FBI needs experts who can analyze a company's financial records closely. Forensic accountants use their investigative skills to track down missing money and analyze financial reports.

About the author:

Megan Lopez is a former accountant and current blogger.  She writes articles on Forensic Accountants.

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