Top 13 Reasons You Need a Forensic Accountant
Forensic accountants are required to maintain a specialized skill set of auditing expertise, education, and training. Combining accounting and analytical talents with financial proficiency and a strong moral compass, a forensic accountant plays a critical role in both litigation support and investigations. First and foremost, a forensic accountant must maintain relevant credentials. Through academic measures and work experience, forensic accounting professionals offer a unique perspective and knowledge that court rooms, businesses, and countless additional entities rely on. From shareholder disputes to business valuation and from financial reporting fraud to the dissolution of a marriage, forensic accountants provides valuable insights to those who depend on their expertise. But who exactly depends on them?
Nearly 500,000 new businesses are formed each year, technology is flourishing at a faster rate than ever before, and divorce rates are rising – these issues lay the foundation for the growing necessity of forensic accounting. While there are multitudes of explanations for why a person might need a forensic accountant, the following are the top 13 reasons:
- Business or employee fraud investigations
- Valuation during the sale of a business
- Shareholder and/or partnership conflicts
- Brokerage fraud
- Marital dissolution
- Commercial insurance claims
- Mergers and acquisitions
- Personal injury claims
- Class action litigation
- Criminal cases
- Contract claims
- Elder financial abuse
- Tax audit preparation
Far too many people and business entities wait too long before speaking with a forensic accountant. Their role, however, cannot be overstated when it comes to discerning the truth and unveiling significant financial findings. Examining business and personal financial records requires time, effort, and expertise. When your financial well-being depends on accuracy, a forensic accounting firm is imperative to uncovering critical problems and inaccuracies when it matters most. As such, having an expert witness makes for the strongest case. Expert witness engagements include any situation where a member of the firm renders a professional opinion in deposition or at trial. The expert’s opinion and work product are subject to discovery and are open to cross-examination.
Forensic accountants are regularly retained in civil, criminal, and family law (divorce) matters, and often participate in the development of pleadings and in the discovery process. From attorneys to litigants, hiring the right forensic accountant is essential in litigation. While he may have spoken in jest, actor James Belushi hit the nail on the head when he said, “In the old days, you would have one lawyer to handle everything: speeding tickets, buying a house, contracts, litigation, real estate, copyrights, leasing, entertainment, intellectual property, forensic accounting, criminal offenses… the list goes on. Now, you have to have a separate lawyer for each one of those categories!” But the truth is that hiring the right expert can make all of the difference.