Nabendu Maji
Bharati Vidyapeeth University
Institute Of Management And Entrepreneurship
Development, Pune
MBA (G) B
Roll No. 73
[email protected]What is Forensic Accounting?
Other Terminology.
What does a Forensic Accountant do?
Types of assignments a Forensic Accountant
perform.
Typical approach to a Forensic Accounting.
Stage to Forensic Accounting.
Applications and Consequences.
The
integration of accounting, auditing and
investigative skills yields the speciality
known as Forensic Accounting.
In other words:
The identification, interpretation, and
communication of the evidence of economic
transaction and reporting events.
Forensic accountingis the specialty
practice area of accountancythat describes
engagements that result from actual or
anticipated disputes or litigation. "Forensic"
means "suitable for use in a court of law"
Forensic Investigation
The utilization of specialized investigative skills in
carrying out an inquiry conducted in such a manner
that the outcome will have application to a court of
law.A Forensic Investigation may be grounded in
accounting, medicine, engineering or some other
discipline.
Forensic Audit
An examination of evidence regarding an assertion
to determine its correspondence to establish criteria
carried out in a manner suitable to the court.An
example would be a Forensic Audit of sales records
to determine the quantum of rent owing under a
lease agreement, which is the subject of litigation.
A Forensic Accountant is often retained to
analyse, interpret, summarize and present
complex financial and business related issues
in a manner which is both understandable
and properly supported.
Forensic Accountants can be engaged in
public practice or employed by insurance
companies, banks, police forces, government
agencies and other organizations.
A Forensic Accountant can be of assistance in various ways,
including:
Investigative Accounting
Investigating and analysing financial evidence.
Review of the factual situation and provision of
suggestions regarding possible courses of action.
Assistance with the protection and recovery of assets.
Co-ordination of other experts, including:
Private investigators;
Forensic document examiners;
Consulting engineers.
Assistance
with the recovery of assets by way of civil
action or criminal prosecution.
Litigation Support
Assistance
in obtaining documentation necessary to
support or refute a claim.
Review of the relevant documentation to form an initial
assessment of the case and identify areas of loss.
Assistance with Examination for Discovery including the
formulation of questions to be asked regarding the
financial evidence.
Attendance at the Examination for Discovery to review
the testimony, assist with understanding the financial
issues and to formulate additional questions to be asked.
Review of the opposing expert's damages report and
reporting on both the strengths and weaknesses of the
positions taken.
Assistance with settlement discussions and negotiations.
Attendance at trial to hear the testimony of the opposing
expert and to provide assistance with cross-examination.
Criminal Investigations
Shareholders' and Partnership Disputes
Business Interruption / Other Types of
Insurance Claims
Business/Employee Fraud Investigations
Business Economic Losses
Professional Negligence
Meet with the client
Perform a conflict check
Perform an initial investigation
Develop an Action Plan
Obtain the relevant evidence
Perform the analysis
Prepare the report
Attendance at Court
Planning Stage
Meet
with the Client
Obtain
an understanding of issues at hand
Perform preliminary assessment of work to be
done and prepare tentative schedule
Perform
a Conflict Check
Ensure
that the firm does not have conflicts of
interest
Perform
an Initial Investigation
Preliminary investigations examination of available
information
Allows auditors to identify likely trouble areas and
assess the work to be done
Plan the Audit
It Should identify objectives to be achieved and plan
audit methodology to be used
Execution Stage
Collect
the Relevant Information
In depth interviews with clients staf
Examination of hard-copy & electronic info
Electronic info is often best source for
forensic auditors
Specialized computer forensic
auditors are sometimes called in,
depending on the audit
Of-site computers & servers, hard-copy
info, etc. are also examined
Perform the Analysis
Highly
dependent on specifics of the
engagement
Often involves: calculating economic damages and
sensitivity analysis, tracing of assets
Prepare the report
It
contains the details of the engagement, the
scope, any limitations and a detailed summary of
the findings
Reports are generally confidential and often used in
court proceedings
Review Process & report to the client.
Identify those involved and quantify amount of
fraud.
Present findings to the client and court
Satyam Fraud Case
