People have become accustomed to hearing the term forensic in connection with everything from elections to DNA results. Forensics also exists in the field of accounting
How is it Used?
Forensic accounting is utilized to investigate embezzlement or fraud, along with analyzing financial data. Forensic accountants use their powers of research, discovery and problem solving to detect irregularities, always keeping the intended goal in mind.
Forensic accounting has solved dozens of crimes throughout history. Some of the most notable were the Bernie Madoff Ponzi scheme, Enron scandal, and the Barclays Bank fraud case. The accounting practices have been utilized to convict those involved in the banking, pharmacy, healthcare industries, and laundering of COVID-19 funds. Infamous Chicago gangster, Al Capone, was caught through the efforts of forensic accountants – he committed income tax fraud.
The art of forensic accounting was known and used in ancient Egypt by the pharaohs. The father of modern-day forensic accounting is credited to CPA, Frank Wilson, who was working for the Internal Revenue Service (IRS). He was charged in 1930 with investigating the financials of Al Capone.
The use of forensic accounting can be found in multiple areas encompassing securities and tax fraud, breach of contract or warranties, and insolvency, bankruptcy and reorganization. It also comes into play in cases of business valuations, money laundering, fraud risk assessments, and computer forensics.
Those working in the field of forensic accounting in the U.S. have earned the credentials of Certified Forensic Accountant (CRFAC). Candidates for the certification must have a bachelor’s or master’s and be a licensed certified public accountant (CPA) or an international equivalent.
Forensic Professionals Needed
There will always be a need for forensic accountants, as there will always be those that seek to cheat and defraud. The demand for the professionals continues to grow and offers opportunities with highly sophisticated data analytics, machine learning, and artificial intelligence tools.
At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs. We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today (843) 347-0849 and discover why our clients return to Peavy and Associates, PC year after year!