Forensic accounting is the utilization of investigative and accounting skills to conduct an examination or investigation of a variety of financial related matters ranging from an accounts payable clerk embezzling company money to an executive who is conducting financial statement fraud. Strong tradecraft in working white collar crime requires a variety of disciplines, such as interview and interrogation techniques, business acumen, accounting and investigative skills and understanding criminal behavior.
Some of the most prevalent schemes are embezzlement matters involving trusted colleagues and employees, who use a variety of ways to misappropriate assets and conceal the fraud in the company’s business records. Some of the more common disbursement schemes include billing (purchasing), payroll, and expense reimbursement that are often cloaked in a fraudulent vendor, fraudulent or ghost employee or in a credit card expenditure reimbursement scheme.
Some of the more expensive frauds that necessitate forensic accounting and investigative services are bribery, corruption, theft of intellectual property and financial statement fraud perpetrated by executive management and other trusted employees. Improper asset valuation and classification, improper revenue recognition, liability concealment, related party transactions and general mischaracterization of business transactions to serve the perpetrators financial motivations require a variety of skill sets to discern and present complicated transactions into a probative format to show intent of design.