Have you heard of forensic accounting? It’s actually a special field of accountancy that refers to conducting financial investigations for the purpose of discovering fraud. These investigations are conducted by accountants who differ from the standard ones by being knowledgeable in audits, technology, and law.
Although these services are mainly used by companies that wish to discover embezzlement or be more confident in their mergers, they are also hired by individuals. In fact, a forensic accounting Los Angeles provider also works with inheritance and insurance disputes, as well as dividing marital assets.
Regardless of your needs, these are the main reasons for hiring an experienced forensic accountant.
Having the right skills
One of the main reasons for hiring such an expert is being armed with the necessary expertise as well as a wide range of skills. For instance, such a professional is proficient in conducting audits, settling contract disputes, detecting fraud and embezzlement, aiding mergers, providing testimony in court, as well as investigating other potential financial fraud situations.
Apart from being qualified in finance and accounting, these experts are capable of explaining their findings in a simple, yet knowledgeable manner both to their clients and jury members. They are extremely thorough in their investigations, paying close attention to every single detail. Most importantly, they are incredibly objective, basing their opinion solely on evidence. There is literary no chance for their opinion to be biased.
Perhaps the greatest reason why companies hire forensic accounting services is detecting a fraud within the firm. Unlike standard auditors whose job is detecting material irregularities, this special kind of accountants strive to determine the root of the problem by performing a painstaking inspection of the financial and IT systems of the company.
In addition, hiring such services prior to the annual external audit might save your company from public embarrassment. The findings of external auditors are most commonly exposed to the business world, thus revealing all unfavorable business details which might ruin your business’ reputation. Anyhow, forensic audits are conduced internally, without risking any irregularity to be leaked. Click here to check out the crucial dissimilarities between internal and external audits.
Assistance in criminal investigations
Hiring forensic accounting services may prove to be incredibly beneficial during criminal investigations. It’s common for these accountants to collaborate with lawyers in order to check debts, taxes, or financial statements that may uncover a financial fraud.
If necessary, upon a request from the client, these professionals will present their findings in court. They will provide a detailed report on the fraud, which is sometimes enough to place a criminal behind bars.
Assistance in mergers and acquisitions
Mergers and acquisitions require thorough financial analysis in order for the involved parties to be absolutely certain in the upcoming deal. In the former case, both companies participating in the merger would benefit from a forensic audit that would confirm their revenue, debts, and taxes. Uncovering even a minor irregularity would be enough for one of the parties to give up on the merger.
On the other hand, in the latter case, the acquiring party is usually the one hiring forensic accounting services in order to make sure that the firm they are about to purchase is not fraudulent. In case of discovering an accounting error, the acquiring firm will have the right to lower the bid.
Anyhow, the acquired party may also benefit from a detailed financial analysis, as sometimes it is undervalued by the acquirer. Upon uncovering any error on the side of the purchaser, the acquired party can ask for a higher bid. Visit the following link: https://www.investopedia.com/terms/a/acquisition.asp, to learn more about the process of acquisition.
Embezzlement cases are amazingly frequent, but is usually impossible to discover due to lack of evidence. Standard accountancy services aren’t enough for uncovering this type of fraud, as it requires a complete attention to details.
In most cases, senior employees in companies tend to pay for their own indulgencies with the firm’s money, by using the expense account. Another type of embezzlement would be accepting cash from customers for using their business services and putting the cash in their own pockets. However, a forensic accountant would know the right places to look for an evidence of the stolen money, thus gathering the required proof so as to bring the criminal to justice.
Settling inheritance disputes
Companies aren’t the only ones using the services of such accountants, as individuals have a benefit of hiring them as well. In fact, individuals most commonly require a detailed audit in the case of an inheritance dispute.
Furthermore, inherence disputes usually result from a false picture of the assets that are supposed to be inherited among multiple family members. In case you aren’t exactly persuaded in your share of the inheritance, a forensic accounting expert would conduct a full investigation of the assets. In fact, these services would be convenient in every case that involves inheriting a large estate by numerous individuals.
Dividing marital assets
Another personal reason for hiring this type of accountancy services is upon dividing marital assets, in the case of divorce. In order for everything to be divided fairly, a professional is required to check the accounts of both spouses, as some of them might be hiding certain amount of funds. He/she would check for potential offshore accounts and other tricks for the same purpose.
Additionally, these experts are indispensable in cases which involve a complicated division of assets. They would make sure the procedure is completed in a short notice, without neglecting any important aspect. Since experienced professionals are more likely to finish the audit faster, avoid hiring inexperienced ones, in spite of the lower price for their services.
In case you are suspecting a certain type of financial fraud, make sure you hire a forensic accountant.
There is no faster and more efficient way of uncovering the truth.
Hiring such as professional is definitely worth every penny!