Forensic accounting is a branch of accounting that uses a combination of accounting, auditing, and investigative techniques to detect and prevent financial fraud, embezzlement, and other financial irregularities. Forensic accountants are trained to scrutinize financial records and transactions and to identify discrepancies or patterns that may indicate fraudulent or criminal activity. In New Zealand, forensic accounting is increasingly used to help businesses, organizations, and individuals to investigate financial wrongdoing and to prevent future financial crime.
What is Forensic Accounting?
Forensic accounting is a complex and specialised area of accounting that involves the application of accounting, auditing, and investigative skills to financial disputes including litigation. Forensic accountants use accounting principles and techniques to analyse financial records and transactions in order to identify financial irregularities including fraud and involve both private and public entities as well as Trusts. These irregularities may be related to financial statements, financial records, or transactions that have been misrepresented, or manipulated.
Forensic accountants are trained to investigate and report financial information that is admissible in court. They also use a variety of specialised techniques and software to identify and analyse financial data, such as data mining, predictive modeling, and statistical analysis. They may work in collaboration with legal teams, law enforcement agencies, or regulatory authorities to conduct investigations, gather evidence, and prepare reports that may be used as evidence in court.
When Might You Need a Forensic Accountant?
There are several situations in which forensic accounting may be needed for your business. We have outlined a few of the key reasons why below;
- Dispute Resolution: Forensic accountants can also be called upon to assist in legal disputes that involve financial matters. For example, they may be called upon to provide expert opinions and testimony in cases involving breach of contract, intellectual property disputes, and other commercial disputes involving Companies, Partnerships, and Trusts as well as individual disputes.
- Business Valuations: Forensic accountants can be engaged to value a business or its assets. This may be necessary in cases where there is a dispute between business partners or in cases of divorce settlements. Forensic accountants can use a variety of methods to value a business, including but not limited to future maintainable earnings, discounted cash flow analysis, comparable company analysis, and an asset-based valuation approach
- Forensic Accounting for Companies & Partnerships: Forensic Accountants can conduct a thorough analysis of books and records, as well as computer data files as needed in relation to the operation of companies (large and small) as well as partnerships. In addition, it is common for forensic accountants to provide expert witness testimony when called upon as part of dispute resolution and in court where matters can not be resolved.
- Family Law: Forensic Accountants can provide a careful and thorough analyse and review of assets that are tied up in family law disputes. This can include valuations of various entities including Trusts and superannuation interests. A forensic accountant can also provide analysis and understanding of complex group structures and closely held family groups as well as verification of matrimonial assets and liabilities.
- Anti-Money Laundering Compliance: Forensic accountants are increasingly being called upon to assist in anti-money laundering compliance efforts. This may involve conducting due diligence for customers or business partners, analysing transactions to identify potential money laundering activities, or assisting in the development and implementation of anti-money laundering policies and procedures.
- Insurance Claims: Forensic accountants can be called upon to investigate insurance claims, such as claims related to fraud or other financial irregularities. They can also help businesses or individuals to prepare and present insurance claims in a manner that is consistent with their policy.
- Fraud Investigations: Forensic accountants can be called upon to investigate cases of fraud, such as embezzlement, theft, or financial statement fraud. They use specialised techniques to identify financial irregularities, such as tracing funds, analysing bank statements, and investigating electronic records. They can also help identify potential vulnerabilities and weaknesses in an organisation’s internal controls to prevent future fraud.
How we can help you with an investigation
The forensic accounting team at DFK OGC team is led by Shane Browning. Shane has considerable experience in this area including business valuations, due diligence reviews, forensic accounting for companies and partnerships, litigation support including fraud investigations and economic loss assessments, and providing evidence in Court. Shane can also be called upon to provide expert analysis and reporting in the area of family law disputes. He has provided evidence in litigation matters to the High Court of New Zealand in Auckland as well as the High Court in South Africa in relation to the litigation between Kidd and Van Heeren.
We understand how challenging it can be for parties involved in a forensic accounting investigation. You need to know that you have a skilled and trusted advisor in your corner. In addition to our own expertise, we are able to draw on the skills and experience of our DFK International partners. as appropriate Our team is here to support you all the way through the process.
If you feel that you need to have a confidential conversation with our team right now, please reach out. Accurate and timely advice in these areas is critical for the outcome and Shane would welcome your call.