ACIS: What Forensic Accounting is Really All About
If you're familiar with the TV show NCIS, you may have some idea how criminal investigations take place. But what about when money is involved and an accountant needs to develop an idea of what happened with a specific set of finances? Forensic accounting is the process of looking at the evidence and deducing what really happened with finances, whether it's for a business after a disaster has caused the loss of records or to assist an actual criminal investigation through a law enforcement agency.
Here's a quick look at forensic accounting and what it's about:
Much like a criminal investigator, a forensic accountant is a specialist who deduces what has happened with finances for a specific reason. Whether it's trying to locate fraud within a company or determine what a likely financial picture was for a business after a fire, computer crash or hacking damage, they have specialized knowledge and experience to help them get to the bottom of things.Though you may link forensics with a court of law, it specifically has to do with handling evidence and information with that same level of care. As an example, if a flood wiped out some of your accounting records, a forensic accountant can rebuild as much of those records as is possible to the point that those records would hold up with whatever other agencies were involved, such as the IRS. Much of this information is rebuilt from records that have not been damaged.
Forensic accountants can also help determine damages. If your business has suffered losses due to a flood, the forensic accountant can not only rebuild your records, but also determine how much income you've lost due to the disaster. This allows you to be properly reimbursed by your insurance company, increasing the odds that your business will be able to reopen after the disaster.
Forensic accounting can be a helpful tool when you have to discover what has really happened in a financial issue, whether it's rebuilding your accounting books after a disaster or determining whether to pursue criminal action against an employee that has been embezzling funds. If you need help with forensic accounting for your business, AccountRely is here to help. Please feel free to reach out today to get connected to one of our experienced accounting professionals.