A stab to define Forensic Auditor

Background

Forensics is defined as "being suitable for use in a court of law." A forensic auditor (sometimes known as an investigative auditor) is a specialist working in the accounting field. The position is involved in engagements that are a result of anticipated or actual disputes or potential litigation. They detect and interpret both nonfraudulent and fraudulent activities. The forensic auditor gathers and uncovers possible evidence, is knowledgeable about accounting and auditing standards and is frequently involved in recognizing fraudulent activities. Many times they provide expert witness advice at trials.

Benefits

Benefits obtained by utilizing forensic auditors include revealing any potential areas of questionable concern regarding financial information or operations. Forensic auditors provide benefits in the form of exposing underlying fraud in the financial information. They make certain the financial information is a realistic representation by assessing the account presentation and accounting systems. They can offer suggestions for improving the information. In turn, this can save individuals and companies money and potential liability.

Significance

A forensic auditor is important to know about since this specially trained individual can save companies and individuals from spending large sums of money needlessly in payouts. They can also unveil illegal claims of all kinds, insurance fraud, improper use of funds (such as using client funds for personal reasons), and hidden assets that someone does not want another to know about. They can determine losses suffered from contract breaches.

Types

A forensic auditor not only can work in the general accounting field uncovering fraud, but can become a specialist within a variety of industries. Types of forensic auditors include specialists in the insurance field, personal injury field, claims, construction, or royalty audits. Other types specialize in civil or criminal law. A forensic auditor can also specialize in civil law involving marital and family law (helping to determine equitable asset splits), estate setting, and investment analyzing.

Function

A forensic auditor is used to analyze financial information that is a potential source of litigation or dispute. They can be used regularly to ascertain whether or not information is correct or they can be used when potential disputes or litigation present themselves. Some of the cases may include determining child support payments, embezzelment or recordkeeping.

Forensic accountants

Forensic accountants may be involved in recovering proceeds of crime and in relation to confiscation proceedings concerning actual or assumed proceeds of crime or money laundering. In the United Kingdom, relevant legislation is contained in the Proceeds of Crime Act 2002. In India there is a separate breed of forensic accountants called Certified Forensic Accounting Professionals. Some forensic accountants are also Certified Forensic Accounting Professionals, Certified Fraud Examiners, Certified Public Accountants, Chartered Accountants or ACCAs.

Forensic accountants utilize an understanding of business information and financial reporting systems, accounting and auditing standards and procedures, evidence gathering and investigative techniques, and litigation processes and procedures to perform their work. Forensic accountants are also increasingly playing more proactive risk reduction roles by designing and performing extended procedures as part of the statutory audit, acting as advisers to audit committees, fraud deterrence engagements, and assisting in investment analyst research.