Most times when you hire an accountant or outsource your business finances to an accounting firm, you’re just looking to make sure the person you hire can help manage your cash flow better, or make sure the IRS doesn’t come after you for tax errors. But sometimes there are occasions when you start seeing a few discrepancies show up on your financial records or receive complaints from customers about billing invoices that don’t seem accurate. These could be signs of fraud or embezzlement that could be going on without being very obvious. Sometimes your finances need a little more closer analyzing that a forensic accounting can give them, and if done quickly enough this kind of accounting can mitigate any major damage done by fraud.
Certifications Forensic Accountants Hold
Forensic accountants are not just any accountants who know their numbers and know tax or securities laws. They need to have a very well-trained acumen that can really distinguish between just bookkeeping errors and actual misappropriation of funds. While practically all forensic accountants have earned degrees in regular accounting and have started out doing regular accounting work, they usually will go on to get more advanced training in their field and go for certifications that lets clients know they can get the job done. As explained here, the American Institute of Certified Public Accountants (AICPA) and American College of Forensic Examiners International (ACFEI) are the two main associations that issue certifications for forensic accountants. Usually they will already be registered as CPAs, and credentials such as a CFF or CFE are what you should look for when looking into forensic accountants.
Where You Can Find Forensic Accountants
Accounting firms can employ individuals who have backgrounds and qualifications in investigative accounting, or have the previous mentioned credentials, but you can find them in other agencies. Some have even taken down notorious crime syndicates while working for the FBI or Secret Service. No matter who they work for, their job is to confirm their financial investigation has conclusive evidence that will hold up in a court of law. This is why experience matters and having great reviews from previous clients is important to look for when choosing your forensic accountant.
The bottom line is even if there’s not any actual fraud or laws broken with how your funds have been handled, it certainly can pay to have a forensic accountant double check them. Sometimes it’s emotionally difficult to realize the possibility that an employee or someone else you trust could be committing theft, but a forensic accountant can look into all financial activities while being completely inconspicuous and neutral in finding evidence and making sure it’s completely accurate. Often the most recommended way to handle suspicions of someone committing fraud is not to make your suspicions known so that the perpetrator doesn’t destroy the evidence, and then discuss with your forensic accountant how to proceed. Most forensic accountants will operate like private detectives and uncover hidden personal or business assets that may be hidden. Independent forensic accountants are not cheap, but they are usually well worth every penny spent on them.