Forensic Accounting
The Creative Accountants – not your average bean counters…
Divorce cases.
What Is Forensic Accounting?
In recent years, this term has come to represent a myriad of services under the umbrella of “investigative accounting”. Essentially, it is the application of incisive accounting techniques in the critical evaluation of financial records.
The distinction between this and “auditing” is simple, although increasingly narrowed. Auditing is performed with the ultimate objective of measuring compliance with certain accounting standards. By contrast, forensic accounting is performed with the ultimate objective of achieving financial transparency, of identifying accounting problems and solving them.
To get a more complete view, read some of our Forensic Accounting Case Studies.
Forensic accounting techniques can be used either independently or in conjunction with other financial analyses.
In a divorce case, it could be used to distinguish between separate and community funds at the time of divorce. It could also be used in conjunction with a business valuation to substantiate that the financial information used in the appraisal had not been manipulated by the in- or business-owning spouse.
In an economic damage case, on the other hand, it could be used to evaluate the revenues and expenses that constitute lost profits. It could also be used in conjunction with a business valuation during instances when a business value is alleged to have been diminished or destroyed as a result of another party’s actions.