A fraud can be uncovered in many different ways. A good example is by the routine activities of the internal audit team or alternatively by a whistleblower who who might inform his managers that a colleague has been fraudulently stealing from the company. Corporate fraud needs to be investigated quickly in order to prevent further damage affecting the organization and to find out how the fraud happened in the first place. It may be possible to recover any losses that have taken place by tracing them from the company to their destination.

A specialist fraud investigator is consistent with such a task and it is usually the case that the victim company will enlist the services of a qualified forensic accountant. Such a person will be recognized by one or more professional bodies to investigate a fraud matter. He or she may be a Chartered Accountant or a Certified Fraud Examiner with possibly other qualifications together with many years of experience dealing with such cases.

Every fraud is different. There are various distinguishing characteristics to be found between, for example bank fraud, insurance fraud and mortgage fraud. Even in these categories there may be many possibilities for different problems because the fraudster is very resourceful in seeking out new and different weaknesses in a business.

The investigator will approach the discovered fraud by first determining what the organisation wants to get out of the investigation. This might be simply to get the money back or it might want to make an example of the fraudster as a lesson to others. If it just wants to get its losses back it may not welcome law enforcement investigating as this might disrupt its business or cause its reputation to be damaged. For example a bank might not want the general public to know that it had allowed a fraudster to work in its midst.

The forensic accountant or certified fraud examiner will want to plan a result of problems with the company and develop an investigation strategy based upon any contingency policy or “fraud response plan”. It may be possible to interview the whistleblower early on to get a quick “heads up” into what was going wrong before beginning a detailed analysis of the accounting records, interviewing staff and making other enquiries often outside the organisation.

For the actual approach to the investigation the forensic accountant will probably want to follow the trail of the stolen money. “Follow the money” will be the primary goal as this will provide not only a chance of getting the money back, but also evidence of why and how the fraud took place.

Forensic accounting is a rapidly expanding field involving careful investigative work, in depth financial analysis and an understanding of the legal system. Forensic accountants must think on their feet and work side-by-side with law enforcement personnel in order to solve the puzzles surrounding fraud cases. Frequently they are required to testify in court as expert witnesses and provide key evidence leading to convictions. Evidence is gathered from books and other records including computers, hard drives, and email correspondence and computer records. It is then carefully traced back to where the problem first began. Forensic accountants act as detectives, lawyers, CPA’s and scientists. These professionals often have highly developed deductive reasoning skills, familiarity with legal procedures, good writing skills and excellent public speaking skills. They have the responsibility of convincing a judge and jury that the evidence they have gathered is solid.

As technology improves and the amount of money stolen from companies and corporations grows, the demand for forensic accountants has grown rapidly. Considered to be one of the fastest growing accounting jobs, it is predicted that this profession will be among the top twenty in the next few years. Schools have begun to offer programs in this field to help meet the strong and ever increasing demand for forensic accountants.

In the computer age, fraud comes in many forms.  It is much easier for criminals to embezzle money without detection. This is why forensic accountants typically need advanced computer knowledge. They must be able to extract evidence from computer hard drives. Business owners look to forensic accountants to help implement preventative measures. Many businesses hire these professionals to examine documents and computers regularly so that the chances of a serious problem are minimized. Forensic accountants also find employment in police departments, law firms and governmental agencies.

While working for a law firm, there are a variety of legal disputes that a forensic accountant may assist in. In divorce cases, assistance is needed in dividing assets. Disputed assets are often investigated behind the scenes in order to determine the most equitable way to split them as well as determine if both parties are credible. Forensic accountants also assist lawyers in bankruptcy cases. Evidence is gathered to ensure that there is no suspicious financial activity surrounding the case. Copywriting and patent infringement, insurance fraud, personal injury, and construction audits are among the kinds of cases that forensic accountants are often called upon to investigate. Police departments hire forensic accountants for many of the same reasons, especially to gather evidence for prosecution that will stand up in court.

Forensic accountants are vital to the survival of both large and small companies. There will always be new work to do as technology advances. People with an interest in accounting and detective work who are inspired to identify criminal activity and therefore prevent business failures should consider this as a career option.