In the U.S. in 2008, fraud and abuse cost organizations and persons more than $994 billion annually. The Association of Certified Fraud Examiners goes on to say that number was up from $600 billion in 2004. Fraud not only costs companies time and money, it can cost people their livelihood and cause a great deal of pain. It is extremely important for companies and governments to implement procedures to both prevent and detect fraud. Forensic accountants are invaluable in this daunting endeavor.
What is a Forensic Accountant?
Forensic accountants are highly trained and experienced accountants, auditors and investigators of financial and legal documents. They specialize in detecting possible fraud. Forensic accountants are often hired by companies or governments to investigate suspicions of fraudulent activity, or in some cases, are hired to audit files as a fraud prevention method. Should fraudulent activity be discovered, forensic accountants often work very closely with members of law enforcement, lawyers, and the court system by appearing as expert witnesses. As an expert witness, the forensic accountant will be required to give an objective, unbiased opinion on matters that are within his/her expertise. The forensic accountant is expected to act with integrity and adhere to high standards of conduct and confidentiality. These experts are highly relied upon and are deeply respected within the accounting and legal industry.
Fraud detection and fraud prevention are a top priority in this day and age. Trained investigators are needed to help avert the current trend of an increase in fraud related losses. A good accountant can compile and produce accurate information. It takes a skilled and trained forensic accountant to analyze the compiled data and recognize possible fraud. Furthermore, the forensic accountant is able to analyze the systems their clients have in place and be able to spot potential weaknesses or flaws in the system that may make the client more susceptible to fraud. What a priceless service forensic accountants can offer their clients.
Written by Tara Glasford, Sioux Falls Accounting Chair