Any individual who has been financially taken advantage of should consider seeking the services of a forensic accountant. Forensic accountants are trained to thoroughly investigate financial cases and bring justice to those who have been robbed or wronged. If you think you may be in such a position, a forensic accountant could be the answer for your case. In what specific circumstances do individuals hire forensic accountants? In the content below, we discuss in detail the signs that you should hire a forensic accountant.
The Significance of Fraud
Although fraud is not the only situation a forensic accountant specializes in, fraud is a prevalent, significant reality faced by many individuals and companies. On an annual basis, many companies lose a significant percentage of revenue due to fraudulent activity.
Proving fraud involves showing that a defendant’s actions included a false statement of material fact, defendant knowledge that the statement proved untrue, defendant intent to deceive the alleged victim, justifiable reliance by the victim on the statement, and resulting injury to the alleged victim. Thus, if you or a member of your company suspects fraudulent activity, consult the services of a professional forensic accountant immediately as a safeguard for the future of your organization.
Signs You Should Hire a Forensic Accountant
Are You Involved in a Shareholder or Partner Dispute?
Partners disputing over rights to compensation or benefits should pursue the services of a forensic accountant, especially as disagreements become combative. The accountant will holistically observe the situation, take the entire picture into consideration, and determine the proper compensation or benefits owed each partner or shareholder without a bias. Ideally, the partners or shareholders involved will accept the outcome and continue in diplomatic partnership.
Are You Suffering Commercial Damages?
Commercial damages include, but are not limited to, the following: breach of contract, intellectual property infringement, fraud, construction claims, and product liability. When faced with unjust commercial losses, a forensic account provides expert testimony. Your accountant explores the complexities of the case and later presents the facts in court.
Have You Identified Employee Theft?
Fraud can infiltrate an organization from every angle. Unfortunately, employee fraud is a common and complex issue. Business and employee relations can be challenging to navigate. However, every unjustly obtained asset should be returned to the organization, and a forensic accountant is often required. Your forensic accountant will investigate the situation, identifying the total sum of damages via forensic intelligence gathering, suspect interviews, the tracing of funds, and other necessary measures. A trained professional is usually required to uncover and rectify total damages in court.
Are You Suspicious of Your Business Manager?
Unfortunately, not every person is trustworthy to hold positions of power within a company. If you suspect fraudulent activity among a manager or managers running your business, hire a forensic accountant to perform a fraud risk assessment and prevent further financial theft.
Is Your Commercial Insurance Failing to Follow Through?
If commercial insurance claims are not being properly followed through, a forensic accountant is often hired to examine coverage issues and calculate total losses owed.
Do You Question the Accuracy of Your Bookkeeping Records?
Unfortunately, as in many areas of an organization, accounting malpractice commonly occurs. Once again, a forensic accountant helps examine records to uncover the exact actions of the bookkeeper under your suspicion.
Are You About to Sell Your Business?
Selling a business is no small task, and forensic accountant services are integral to determining an accurate company value. Even if you plan to sell in the future, knowing the value of your business as any given time allows you to stay relevant.
Is Your Organization About to Face a Tax Audit?
Organizations often fear tax audits, simply due to disorganization. Forensic accountants are a critical tool in helping businesses prepare for a tax audit. Your accountant will ensure records are organized and in order, allowing for a smooth, successful audit.
Are You Interested in a General Fraud Risk Assessment?
Businesses interested in challenging and overcoming the status quo consistently seek opportunities to grow, optimize, and improve. Performing a fraud risk assessment, or internal controls review, is an area of growth. During a fraud risk assessment, a professional forensic accountant reviews the standard procedures that govern a company’s transaction cycles, including procurement, cash disbursements, and vendor selections. After analysis, a generated report highlights any outlining gaps in the company’s internal control structure, weaknesses that could lead to fraud. Then, the forensic accountant walks the organization through practical steps to reduce fraud vulnerability in each identified area.
Why Should You Hire a Forensic Accountant?
A forensic accountant is a professional, trained to identify and rectify cases of fraud or financial instability. Forensic accountants are CPAs first who pursued further education, rigorous training, and a complex examination.
When dealing with cases of fraud, a forensic accountant will always abide by two legal principles: Proximate Cause and Reasonable Certainty.
Proximate Cause: Recovery of lost profits damages is subject to the general principle that damages derive from the illegal incident. The proximate cause oversees the recovery of compensatory damages.
Reasonable Certainty: Damages for lost profits must be proven with reasonable certainty. Damages must be capable of measurement, based on reliable factors – not on unwarranted speculation.
Each governing principle is reinforced by case law, and excellent forensic accountants incorporate each principle into the case at hand, as applicable – demonstrating trustworthiness.
Utlimately, individuals who have been financially taken advantage of can benefit significantly from the professional help of a forensic accountant. Forensic accountants bring attention to detail, effective communication, and professional skepticism to every fraudulent investigation.
DHJJ – Forensic Accounting Services
At DHJJ, we understand that theft and fraud pose a serious threat to your business. When fraudulent activity strikes, piecing together what occurred requires careful reconstruction and detailed analysis.
You can count on DHJJ for experienced, professional forensic accounting services. Please do not hesitate to contact our team with potential fraud suspicions at 630.420.1360 or via our contact form.