There are multiple types of accountants that your business can work with. You can work with a payroll accountant to make sure that your payroll is handled correctly, or a tax accountant to make sure that your taxes are paid on time, or a forensic accountant. A forensic account is a very specialized type of accountant.
What a Forensic Accountant Does
They are able to investigate the flow of money into and out of your business. They look at all records such as payroll, invoices, deposits and withdraws, and use that information to trace the financial history and behavior of your business.
They trace all the money that comes in and out of your business to make sure that it goes where it is labeled as going. They can even trace and figure out who was in charge of all the financial transactions and who made which financial deals.
A forensic account is like a financial investigator or detective.
When a Forensic Accountant is Used
Forensic accountants are used for a variety of different reasons.
Oftentimes, a company board or business owner may ask a forensic account to investigate if they have questions about the flow of money into and out of the business. When a business owner or board member suspects fraud on the part of an employee or a part of the company, a forensic accountant may be brought in to determine what is really happening with the money.
A forensic accountant may be brought in for legal reasons. If you are being sued for any reasons, and you need to show the wealth of your company, bringing in a forensic accountant is one way to prove and show where all the money from your business is going and to show the overall wealth of your business.
A forensic accountant may also be brought in if your firm is being audited by the IRS or by another audit firm or organization that oversees the type of industry that you are in. When you know you are being audited, you want to make sure that all of your records are correct, and that everything lines up exactly as you said that it does on paper. A forensic accountant can help strengthen the validity of your accounting and provide a third party to review your finances in an audit situation.
A forensic accountant is a special type of accountant who can look at your books and make sure that all the money is going where it should go. They can be helpful when fraud is suspected within your business or something just doesn't add up. They are also useful when facing legal matters and litigation.