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Forensic accounting also known as financial forensics is a specialty practice area of accounting that describes engagements that result from actual or anticipated disputes or litigation. As per the Oxford dictionary reveals, forensic accounting means the use of accounting skills to investigate fraud or embezzlement and to analyse financial information for use in legal proceedings. Forensic accountants are also referred to as forensic auditors or investigative auditors, often have to give expert evidence at the eventual trial.
Forensic analytics is a four-tier procedure which start with data collection, proceeded by data preparation, quantified with data analysis, and concludes with reporting and court proceedings.
Finally, ‘forensic auditing’ refers to the specific procedures carried out in order to produce evidence. Audit techniques are used to identify and to gather evidence to prove, for example, how long the fraud has been carried out, and how it was conducted and concealed by the perpetrators. Evidence may also be gathered to support other issues which would be relevant in the event of a court case. Such issues could include:
