A relatively unknown yet important sector of the financial industry is forensic accounting. This area uses financial knowledge in the application of law. Forensic accountants are relied on as key experts in criminal negligence cases, which can involve minor infractions such as tax fraud to global concerns like industrial espionage.
It is a highly specialized area of accounting that requires professionals to constantly be ready for pending or anticipated cases. It is typical for these experts to be called to court and explain – in a clear and simple way – the facts of the case. Accounting is a difficult topic to understand and lay people often find it challenging to keep up with all the jargon. As such, effective forensic accountants are those that are able to communicate their expertise in a concise manner. They should also have a basic, if not intermediate, knowledge of the law.
Forensic accounting involves two areas. The first is support. Accountants assist the legal party in determining any financial damages and presenting them in legal disputes. The second involves investigation. Forensic accountants must thoroughly review the case and determine the extent of the alleged crime.
It must be noted that forensic accounting does not limit itself to criminal cases. This service can also be applied to any civil matter, including divorce. Disputing couples can hire a forensic accountant to assure no assets are being withheld in a marriage dissolution case.
While a small sector, forensic accounting is a highly respected area of finance.