This led to the convictions of Ken Lay, Andrew Fastow and Jeff Skilling. (Fox, 2004) As far as Bernard Madoff scandal is concerned, forensic accountants identified how the Ponzi scheme worked and what allowed it to continue for 18 years
It is at this point when everyone can understand the full context of the case. (Singleton, 2010) (Golden, 2011) Analyze the legal responsibility a forensic accountant has while providing service to a business
At the same time, they have been instrumental in helping the trustee to identify and go after key assets. (Lewis, 2011) Conclusion Clearly, forensic accounting can assist firms with mitigating risks
These tools will ensure that a firm is efficiently operating its business by reducing illegal activities and increasing transparency. (Pedneault, 2012) Finance is when actuaries are carefully tracking where the money is being spent
Together, these different elements will illustrate the significance of forensic accounting in mitigating potential risks and enhancing transparency. (Riley, 2011) Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill
It is at this point when everyone can understand the full context of the case. (Singleton, 2010) (Golden, 2011) Analyze the legal responsibility a forensic accountant has while providing service to a business
Forensic accountants have assisted in investigating major financial and accounting frauds like the collapse of Enron. After Enron collapsed, forensic accountants investigating the company revealed that for many years, the company executives issued false financial statements (Boone & Kurtz, 2011)
This is a method for investigating business situations and financial transactions to gain the truth and opinion on fraudulent activities (Kushniroff, 2012). The field of forensic accounting has two main areas of expertise, these are investigative accounting fraud, and litigation supports (Bruce, 2009)
Forensic Accounting Skill Set for Forensic Accounting Forensic accounting is the search of evidence and financial facts of legal problems for a civil or criminal court. This is a method for investigating business situations and financial transactions to gain the truth and opinion on fraudulent activities (Kushniroff, 2012)
A forensic accountant with these skills can take the right legal action against a business or partners associated with a specific accounting problem. Secondly, forensic accounts require the ability to identify legal issues (Malan & Smit, 2001)
An accountant carrying out a forensic search on financial accounts searches for factual data on specific documentation and financial information. They carry out detailed investigation of facts and use supporting documentation to backup these facts (McLean, 2012)
Forensic accounting entails litigation services and investigative accounting. In each category, an account is required to provide forensic evidence of the crime and testify in the courtroom (Pagano, 2005)
First, forensic accounts need to posses the ability or know how of the law of evidence to be effective investigators. This involves their legal stipulation and legal mandate on carrying out forensic accounting activities, and the legal definition of forensic accounting separate from fraud detection (Ramaswamy, 2005)
In December 2009, Sujuta Sachdeva, the Vice President of Finance at the company was fired. This followed a discovery of her embezzlement of funds for four years to pay credit card debts, buy jewelry, and furs (Singleton & Singleton, 2010)
The goal of a forensic accountant is "to establish a realistic value of the business consistent with the client's goal, a value defendable under cross-examination in the courtroom." (Nunn, McGuire, & Whitcomb, et al
The goal of forensic accountants is to fight financial crimes within the contemporary business environment. (Patil, 2011)
The Role of the Forensic Accountant in the Courtroom A forensic accountant may be in court for several different reasons. Forensic accountants can appear in almost any type of lawsuit, but they are most likely to be used in: helping determine valuations; personal injury and wrongful death calculations; economic damage calculations; bankruptcy, insolvency and reorganization; family law; financial statement misrepresentation; computer-forensic analysis; and fraud detection and analysis (Acuff et al
Not surprisingly, each different group named different skills as critical to the forensic accountant, but they agreed that some skills, such as analytic skills, were critical to the job description. The top five skills highlighted in this paper have been drawn from the top five picks of each group of professionals, with an emphasis on those skills that were selected by multiple groups of professionals (Davis et al
To understand what has happened and develop evidence for the courtroom, the "forensic accountant comes upon a financial scene in much the way that a detective works to solve a mystery: looking for clues, interviewing witnesses, obtaining and analyzing evidence. He or she combs through it all, searching for anomalies and inconsistencies around a common thread that might explain the entire picture" (Tucker, 2011)
Forensic accountants use their work in courtroom and other legal settings to help. Their primary roles are litigation support and investigative accounting (Zysman, 2012)