What Is a Forensic Audit?

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An accountant audits a company's financial statements on an annual basis. His audit ensures that the company's financial statements reflect its current position. Forensic audits are different. A forensic accountant examines the company's books for evidence of fraud, as well as inspects the accounting system for weaknesses that could enable someone to defraud the company. His work might uncover insurance fraud, asset misappropriations, embezzlement, money laundering and other white-collar crimes.

Forensic Audits

  • Forensic accountants or fraud examiners often conduct investigations in conjunction with law enforcement and in private legal disputes. The field falls into two primary categories: litigation and investigation services. Basically, a forensic accountant combs through a company's records, ferreting out fraud or other financial malfeasance. It's a time-consuming process because sophisticated financial schemes require intense investigation and attention to detail. Forensic auditors often testify in court proceedings about their findings. They receive specialized training in fraud detection and data analysis to conduct their work.

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