
Why is forensic accounting in fraud so important? When do you need a forensic accountant in a fraud investigation?
Huge amounts of money are fraudulently obtained and trafficked in the UK every day.
Fraud is a massive problem for businesses and organisations of all kinds and for that reason, highly-skilled accountants are often consulted to carry out fraud investigations.
Forensic accounting in fraud cases helps to identify what has been taking place and how much money has been fraudulently obtained. It provides the necessary information and evidence for businesses, organisations and individuals to gain redress and recover their losses.
Forensic accounting covers the whole investigation process from data gathering and interviewing the parties involved to compiling extensive reports on the findings.
Forensic accountants act as expert witnesses in fraud cases. They ensure cases can run smoothly and take care of a key aspect of the investigation.
Complex evidence requires specialist knowledge
The evidence involved in fraud investigations can be wide, complex and varied. Understanding it takes real specialist knowledge.
Forensic accountants are required to not only understand the evidence but to be able to interpret it as well.
They have to be able to draw out strands that look interesting or concerning and should be able to make connections between different pieces of evidence.
Forensic accounting for fraud uses a variety of methods
Forensic accountants will make use of a range of different investigative and interpretative techniques to understand the evidence.
This will include computer-assisted audit techniques that can scan large volumes of data to assess anomalies.
Every transaction for the business during a set period will be looked at and further investigations carried out where necessary.
Forensic accountants may also conduct interviews about financial practices and documentation as and when required.
When forensic accountants are appointed at the beginning of the investigation process they may be able to determine its extent and scope.
Independent expert opinion
Forensic accountants are highly qualified with years of experience.
Many will have accreditation as forensic accountants by professional bodies. Their depth of experience when it comes to business practices, financial management and corporate accountancy, means they can accurately interpret large volumes of data, documents, transactions and banking records.
As well as being able to quantify large and diverse amounts of financial and business data, forensic accountants have investigative skills to support or challenge the value of any claim. They can provide key determining evidence in a vast range of financial cases, such as insurance claims and funding terrorism, as well as criminal and civil fraud.
The evidence that a forensic accountant uncovers will often prove decisive.
Support for legal professionals
Forensic accounting in fraud provides a valuable service for legal professionals who may not have the time, skills and knowledge to properly assess the financial aspects of a case.
Forensic accountants are on hand with expert insight and support. They can answer any questions the legal professionals may have, helping them to build a strong case from the financial evidence.
Navigating complexities
Fraud cases are, by their very nature, complex and involved. There are huge volumes of evidence involved in fraud cases and these can lead to complexities and hold-ups in the cases. Trials can last for months.
Investigations can be further complicated by problems with the evidence, such as documents being falsified or destroyed.
A forensic accountant will help navigate complexities and will understand how to withdraw information from the evidence that’s available, however partial or incomplete. They will ensure that the available evidence is as persuasive as possible before the case goes to court.