Posted by Kimberly Culcay.
In the article, “What Types of Legal Cases Require a Forensic Accountant,” Henry Rinder describes what a forensic accountant really is and the need for such a professional. The article discusses that there is a difference between a traditional accountant and a forensic accountant. A forensic accountant combines accounting knowledge and legal expertise to help their clients, from individuals to small and large businesses. The forensic accountant is a person that exhibits a curiosity that allows him or her to figure out if a company is hiding something. Some of the legal cases that require forensic accounting are criminal investigations, fraud, shareholder disputes, and divorce. For example, it is common in divorce cases for one party to hide assets to prevent splitting up everything they have.
In criminal investigations forensic accountants help find key elements to help law enforcement officers investigate crimes. Forensic accountants have some duties when being involved in criminal investigations, such as analyzing personal and business documents, tracing and recovering hidden assets, and tracking and reconstructing transactions and wire transfers. From the information provided above, it is easy to see that the need for forensic accountants in the field is growing rapidly. Fraud is something a traditional accountant may stumble upon in their career, but a forensic accountant is a person whose job is to detect it. As stated in the article, some of the duties forensic accountants have when helping with fraud investigations are detecting employee theft and fraud, investigating embezzlement, looking for inconsistencies in financial filings, assessing financial losses, and assisting with insurance claims and restitution orders or agreements.
Fraud falls under the investigative side of a forensic accounting because in a sense the accountant is acting as a detective. The other side of a forensic accountant is they can testify as an expert in court. Personally, I never expected for a forensic accountant to be involved in divorce cases, however if makes sense that a forensic accountant will usually assist in dividing assets and other valuables owned by one or both spouses during the marriage. Asset tracing is a key way for a forensic accountant to detect if someone has tried to conceal assets. Amongst others, some of the duties forensic accountants have helping with divorce cases are evaluating a spouse’s personal and business statements, tracing assets, debts, income, determining the value of concealed assets, ensuring equitable distribution and helping with divorce negotiations. Overall, the forensic accountant is there to help a spouse so that he or she has an opportunity for a fair and equitable distribution of the assets.
I think that with the evidence presented in this article it is evident that there is a need for forensic accountants in legal cases when it relates to finances. Forensic accounting is interesting to me because I always wanted to be a detective, but I knew that the job market was not going to consistent. Therefore, it is exciting to find out that forensic accountants can serve the public in this way.
Kimberly is a graduate forensic accounting student at the Feliciano School of Business, Montclair State University.
Reference: Rinder, Henry. “What Types of Legal Cases Require a Forensic Accountant.” Smolin Lupin. 7 Oct. 2014. Web. 21 Oct. 2015. .