Forensic accounting involves analyzing financial records to investigate fraud, embezzlement, or hidden assets. It has two parts - investigative accounting and litigation support. Forensic accountants investigate and analyze financial evidence, develop tools to assist with analysis and presentation, communicate findings in reports and exhibits, and testify as experts in legal proceedings. The field emerged because auditors could only check for compliance, not detect fraud. Forensic accountants now provide litigation assistance related to quantifying economic damages. Specialization in this niche field has become important due to corporate scandals, demands for transparency, and fast business development.

3.  An orderly analysis, investigation, inquiry, test,
inspection, or examination along a “paper trail” in the
search for fraud, embezzlement, or hidden assets
 Two parts:
Investigative accounting
Litigation support
 Treats all figures as suspect until proven otherwise

4. Motive
Rationalization Opportunity

5. Fraud is something the internal or external auditors
were supposed to guard against through their
periodic audits. Now that auditors can only check
for the compliance of a company’s books to generally
accepted accounting principles, auditing standards,
and company policies, a new category of accounting
was needed to detect the fraud in companies that
suspected fraudulent transactions.

6.  Investigating and analyzing financial evidence.
 Developing computerized applications to assist in
the analysis and presentation of financial evidence.
 Communicating their findings in the form of reports,
exhibits and collections of documents.
 Assisting in legal proceedings, including testifying in
courts, as an expert witness and preparing visual aids
to support trial evidence.

7. Often associated with investigations of criminal
matters.
For eg: A typical investigative accounting assignment
would be an investigation of employee theft.
 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

8. Provides assistance of an accounting nature in a matter
involving existing or pending litigation. It deals primarily
with issues related to the quantification of economic
damages.
 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 settlement discussions and negotiations.

9.  Criminal Investigations
 Shareholders' and Partnership Disputes
 Professional Negligence
 Business Economic Losses

10.  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

11. Niche consulting refers to the need to specialize.
The need for niche consulting has become imperative
because:
 Recent corporate accounting scandals
 Outcry for transparency and honesty in reporting
 Fast based development in business

12.  Curiosity
 Persistence
 Creativity
 Discretion
 Confidence
 Sound professional judgment

13.  Post Graduate Diploma in Forensic Accounting
 Certificate Course in Forensic Accounting Profession
 Certified Anti-Money laundering Expert
 Certified Bank Forensic Accounting
 Certified Vigilance and Investigation Expert

14. Forensic accounting has come into the lime light due to following
reasons:
-- rapid increase in frauds and white collar crime
-- belief that law enforcement agencies have insufficient
expertise
Forensic accounting, in fact, integrates accounting, auditing, and
investigative skills to conduct an examination into a company’s
financial statements.
While the forensic accounting and auditing practice had
commenced in the US as early as 1995, the seed of this
specialization has yet to take off in India.