Forensic Accounting – A More Exotic Accounting Type

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Forensic accounting is one of the little covered types of accounting because not many individuals are willing to venture into it. However, it is a very lucrative field where they can earn a six-figure salary. To understand more about this form of accounting, read on.

About Forensic Accounting

Forensic accounting is a type of accounting that helps clients discover economic information. It is used in a court of law, which is why forensic accountants are bound to appear in court to provide expert evidence. Because this form of accounting is exotic in nature, only large accounting firms and boutique firms have their own forensic accounting departments set up.

Types of Forensic Accounting

There are a few branches of forensic accounting which are offered by major accounting companies, and those are:

  • Legal Aid Assistance Accounting – Accountants specialized in this branch of forensic accounting are in charge of uncovering the economic situation of parties involved in a lawsuit or are acting as witnesses in a legal case.
  • Investigative Accounting – This branch of accounting and reporting is used most by the FBI, CIA and government institutions. It mainly focuses on discovering and tracking down the financial records of companies or individuals.
  • Insurance Claims Accounting – Some accounting firms offer forensic accounting for insurance claims, which usually include personal injury claims. Accountants will be in charge of estimating all claims before the insurance company pays.
  • Fraud Claims Accounting – Fraud claims are popular in today’s business world. Accountants spend a lot of time and paperwork to investigate claims from different industries based on business operations, finances or management.

Necessities of Forensic Accounting

Forensic accounting depends on understanding the company or person under investigation fully. Therefore, information on how much the person or company makes, the business’ value in the market, and other important information. This data can be collected from financial statements, bank statements and credit statements. However, any other financial document will also be helpful in this type of accounting.

Forensic accounting is an important tool for companies and individuals to ensure their compliance with their industry’s best practices. Therefore, its need will continue as long as business operations are run.

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