Forensic Accounting: Definition and How it Works

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Forensic Accounting: Definition and How it Works

Once you hear the word forensic, you might probably think about a crime scene and some investigators tracking down criminals using fingerprints, bloodstains and other clues. And then here you are thinking, how did the word “forensic” get associated with the word accounting?

Forensic basically means relating to the application of scientific knowledge to a legal problem. Forensic accounting is defined as one of the fastest growing areas of the accounting industry in the market today, and is a special field within the boundary ground of accounting. Although it doesn’t sound as enticing as all the other investigative parts, forensic accounting has been given the most focus and attention during the past years simply because of the fast growth of financial white collar crimes that involve large corporations. This also leads to different audit firms in Singapore to hire and employ knowledgeable forensic accountants that has the capability to expose all the irregularities and fraud done by accounting firms and their executives.

Forensic Accountants and their Role in Auditing Firms

Hired forensic accountants are more than just crunching numbers, and working on criminal and civil quarrels. They possess exceptional accounting skills and play an important role in the accounting market today. They conduct investigations, and they communicate well, and they are experts when it comes to using the computer.

Aside from numbers and documents provided by the company, investigative accounting also encompasses the numbers and files of the whole business environment as well. Forensic accountants do well to investigate financial procedures of an enterprise, gather important records, and conduct interviews with the ones accused and the involved parties. In short, they provide, collect and analyze all financial data that will provide support for the proceedings. Oftentimes, forensic accountants are requisite to be a witness in the court as to their findings.


Analyzing includes tracing the assets of the company, examining how the profit loss occurred and calculating the exact amount of money lost. After that, forensic accountants will be reporting their strategy, their plan of action and what they have uncovered during the investigation. This report may include graphs, charts, photos and other method of clearly explaining the whole case.

Forensic accounting may be challenging, but it can be a very enjoyable and a rewarding career to enter. Aside from the fact that they get to help companies solve their problems, they get to develop and boost their strategic and communication skills en route to having a successful case. Forensic accountants including the aspiring ones must have deep knowledge of Generally Accepted Accounting Principles (link) and all the business practices they need to encompass to have a flourishing research and examination.

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