What does a Forensic Accountant do?
“The role of the forensic accountant is to investigate and analyse to help resolve financial issues in a manner that meets standards required by courts of law. Forensic accountants apply special skills in accounting, finance, quantitative methods, research and investigative skills to collect, analyse and evaluate evidential matter and to interpret and communicate findings.”, Forensic Accounting, Crumbley, Heitger and Smith
In very simple terms, a forensic accountant provides accounting services in disputes. The forensic accountant has technical ability, such as valuation, accounting, and financial expertise; they investigate – collecting, analysing and evaluating information; and they communicate – interpreting and presenting information clearly.
Forensic Accounting Applications
A forensic accountant is often required to provide the valuation of a business and shares in matters, such as in matrimonial disputes, shareholder disputes, and transaction disputes. Valuations are also required for tax purposes, to assist in transactions and restructuring.
Disputes, such as breach of contract, require a forensic accountant to calculate actual and potential damages such as lost earnings, lost profit, lost business and the physical loss of property. The loss can be caused by damages to property or actions or inactions of an individual or organisations. The work involves analysing historical information, conducting interviews, physical inspections, making assumptions and financial modelling.
Financial Statement Manipulation and Fraud Prevention & Detection
The forensic accountant examines financial statements to identify irregularities, such as overstatements, understatements, and omissions and calculate the effect of such issues. Forensic accountants also evaluated and implement internal controls, financial policies and accounting procedures to prevent fraud. A forensic accountant can investigate frauds to determine what happened, who was involved and how long the scheme went on.
Within matrimonial disputes the forensic accountant assists in a number of ways, including uncovering hidden assets or undisclosed sources of income, valuing business interests and preparing a statement of assets and liabilities.
Simon is a CA Accredited Business Valuation expert, Chartered Accountant and a Certified Fraud Examiner. Simon specialises in providing forensic accounting and valuation services. Prior to founding Lotus Amity, he was a Forensic Accounting partner with BDO Australia and led their National Forensics practice. He has worked as a forensic director for a major offshore forensic accounting practice which included assisting in multi-billion-dollar litigation in relation to giant Bernie Madoff Ponzi scheme. Simon provides valuation services in disputes, for raising finance, for restructuring, transactions and for tax purposes.
Lotus Amity provide Financial Clarity
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