Forensic Accounting is the process of analysing financial records in great detail to establish, typically, whether fraud has taken place, how it was done, the value of the fraud and compiling a file for the relevant authorities.
The current economic climate and a move towards electronic banking have seen a dramatic increase in fraud over the course of the last decade and we have been involved in a number of successful prosecutions against former employees.
Examples of fraudulent transactions we have come across recently include:
We can also perform system audits to identify areas of the business at risk from fraud and make recommendations to reduce these risks.
Regular, timely financial information also helps reduce the risk of fraud, as does segregation of duties, insisting on staff taking their full holiday entitlement and implementing a robust payment and invoice approval system.
As well as situations where fraud is suspected, forensic accounting can also be useful when establishing loss of earnings – for example if a business owner has been involved in a serious accident or following an insured death.