Forensic accounting

Definition

Forensic accounting involves the use of accounting, auditing, and investigative skills to examine financial statements for legal cases. It often aids in uncovering fraud, embezzlement, and other financial crimes.

5 Must Know Facts For Your Next Test

1. Forensic accountants commonly work with law enforcement agencies and legal teams.
2. They are skilled in both accounting principles and criminal investigation techniques.
3. Forensic accounting can be used in civil cases as well as criminal cases.
4. The analysis performed by forensic accountants is often used as evidence in court.
5. A strong understanding of information systems is crucial for detecting anomalies in large datasets.

Review Questions

• What are the primary skills required for a career in forensic accounting?
• How does forensic accounting contribute to legal proceedings?
• Why is knowledge of information systems important for forensic accountants?

Related terms

Auditing:

The examination of financial records to ensure accuracy and compliance with regulations.

Fraud Examination: The process of investigating fraud or financial deception.

Internal Controls:

Procedures implemented within an organization to safeguard its assets and ensure financial integrity.