Page 170 - DCOM409_CONTEMPORARY_ACCOUNTING

Unit 14: Forensic Accounting

confidence Notes
sound professional judgement
A Forensic Accountant must be open to consider all alternatives, scrutinize the fine details and
at the same time see the big picture. In addition, a Forensic Accountant must be able to listen
effectively and communicate clearly and concisely.

14.5 Scope of Forensic Accounting

Forensic accounting encompasses both litigation support and investigative accounting.
Litigation support provides assistance of all nature in a matter involving existing or pending
litigation. It deals primarily with issues related with the quantification of economic damages,
while investigative accounting is associated to the investigation of criminal matters (Zysman,
2001). Under litigation support, forensic accountant assist in:

Obtaining document necessary to support or refute a claim
Reviewing of the relevant documentation to form an initial assessment of the case in an
identified area of loss

Examination for discovering, including the formulation of the act regarding the financial
residence
Attendance at the examination for discovery to review the testimony, assist with
understanding the financial issues and to formulate additional questions to be asked
Investigative accountant on the other hand;
reviews factual situation and provides suggestions regarding possible courses of action

assist with the protection and recovery of assets
Co-ordinate other experts (Zysman, 2001).

Self Assessment

Fill in the blanks:
7. Forensic accounting encompasses both ………..and investigative accounting.
8. ………….provides assistance of all nature in a matter involving existing or pending
litigation.
9. Investigative accounting is associated to the investigation of ………….matters.

14.6 Difference between Forensic Accountant and Auditors

The following table explains the key differences between a forensic accountant and auditor:

Forensic Accountant Auditor
1. Forensic accountants are public accountants 1. Auditors work to ensure their organization is
that have completed specialized training in running efficiently and that mismanagement
the investigation of crimes such as of funds, waste of resources, or fraudulent
bankruptcies, fraud, contract disputes and activities are not occurring.
other criminal financial actions.
Contd...

LOVELY PROFESSIONAL UNIVERSITY 165