Page 174 - DCOM409_CONTEMPORARY_ACCOUNTING

Unit 14: Forensic Accounting

Forensic accounting includes the use of accounting, auditing, and investigative skills to Notes
deal with the legal matters.

It consists of two major components: litigation services that recognise the role of an
accountant as an expert consultant, and investigative services that use a forensic accountant’s
skills and may require possible courtroom testimony.

Forensic Accounting involves the use of accounting/ auditing, investigative skills and
data mining as an audit tool

A forensic accountant has to analyse, interpret, summarise and present complex financial
and business-related issues for investigation.
It is observed that people in positions of power within organizations sometimes
intentionally mislead investors and creditors with deliberately inaccurate financial
statements.

14.10 Keywords

Financial Auditing: Financial auditing is performed by certified charted accountants to check
the regulations of financial statements of an organisation.
Forensic Accounting: Forensic accounting includes the use of accounting, auditing, and
investigative skills to deal with the legal matters.

14.11 Review Questions

1. How forensic accounting is different form financial auditing?
2. A forensic accountant has to analyse, interpret, summarise and present complex financial
and business-related issues for investigation. Discuss.
3. According to Zysman (2001), what are the key assignments performed by a forensic
accountant.

4. How you will identify the financial statements frauds?
5. Identify the scope of forensic accounting.
6. What are the key skills required for forensic accounting?

7. State the difference between forensic accountant and auditor.
Answers: Self Assessment

1. Specialized
2. Certified charted accountants
3. Legal
4. Investigative

5. Risk management
6. Audit
7. Litigation support
8. Litigation support

LOVELY PROFESSIONAL UNIVERSITY 169