21st Century Forensic Accounting

Forensic accountants are engaged for a wide variety of assignments, among them investigating fraud, auditing internal controls and quantifying damages associated with legal disputes. All of these require attention to detail and a diverse set of skills including mathematical, technological, legal and investigative. But the accounting landscape and client needs are constantly changing. Here’s how the profession has adapted and digitized 21st century forensic accounting, and how it's applying the latest technological solutions. Embracing the digital revolution Technology has radically changed how forensic accountants do their jobs. Businesses used to be awash in paper. Today, most companies run on a digital backbone and discourage employees from printing to save money and reduce environmental damage. Consequently, forensic accountants must be able to gather, analyze and make sense of...

Using Lifestyle Analysis to Find Hidden Income and Assets

Forensic accountants have many tools to help them find evidence of hidden assets or fraud. But one of the most effective, particularly in divorce matters or legal disputes with former business partners, is using lifestyle analysis to find hidden income and assets. This method involves developing a financial profile of a subject and then examining mismatches between the person’s known resources and lifestyle. Financial profiling Forensic accountants develop a financial profile of a subject by examining: Bank deposits. The expert reconstructs the subject’s income by analyzing bank deposits, canceled checks and currency transactions, as well as accounts for cash payments from undeposited receipts and non-income cash sources, such as gifts and insurance proceeds. Expenditures. Here, the expert analyzes the subject’s personal income sources and uses of cash during a...