Forensic Accounting Essay

1646 words - 7 pages

A study conducted by two professors from Rider College interviewed over 150 lawyers, Certified Public Accountants (CPAs) and accounting educators. The study identified sixteen skills needed by forensic accountants. According to the study, the five most important skills are analytical skills, basic accounting skills, problem solving skills, data analysis skills and interviewing skills (McMullen & Sanchez, 2010).
Forensic accountants need analytical skills because as they review financial reports and other source documents, they need to analyze the validity of each transaction and determine if the company recorded the transaction fairly. The forensic accountant needs the ability to ...view middle of the document...

The forensic accountant needs to have good problem solving skills to be able to sift thru the myriad of information/data and accounting systems looking for fraud and determining the validity of the information/data. An understanding of the various databases used by accounting departments is also important, without know the various databases, the forensic accountant would not be able to determine if the data is correct. The forensic accountant may apply data mining techniques to test for anomalies to determine the accuracy of the data. They need to be persistent, detail oriented and focused on understanding the financial journals and not taking anything at face value.
Additionally, the forensic accountant needs good interviewing skill to be able to ask the right questions. The forensic accountant needs to be able to ask probing questions that lead to additional areas to be reviewed. Without good interviewing skills the forensic accountant will only scratch the surface of what he is being told. Another aspect of interviewing skills is the ability to determine if they are being lied to and then ask further/follow on questions to get the correct information.

“Forensic accounting is accounting performed for legal review. Forensic accountants take the skeptical view, investigating below the surface of an organization’s accounting system to find out what actually happened” (Boone and Kurtz, 2011, pg.503) A forensic accountant can be used in many ways to support a courtroom environment. These can be divided into four general phases: foundational, interpersonal, data collection and expert report and trial (Warshavsky, 2013). Prior to the start of the case the forensic accountant can be used to provide assistance during the development and discovery stages. This can include conducting interviews and performing background research on potential witnesses and aspects of the case. Data collection can include assessing the financial framework of the case and determining what documents might be relevant to the case. He would continually evaluate the documents submitted by the opposing party and inform his party to their relevance to the case (Warshavsky, 2013). Additionally, he can collect data to either support or refute the legal theories being presented in the case. During the trial, the forensic accountant can be called upon as an expert witness to testify to the accuracy and validity of the data. He can submit an expert report to the court in support of his findings (Warshavsky, 2013).

“Forensic accountants are trained to look beyond the numbers and deal with the business realities. Analysis, interpretation, summarization and the presentation of complex financial and business related issues are prominent features of the profession. A forensic accountant will also be familiar with legal concepts and procedures. Public practice or insurance companies, banks, police forces and government agencies are major employers of forensic...

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