Firms May Benefit From Forensic Accountant
Richmond Times Dispatch (10/01/00) Vol. 3, No. 5 p.12; Stewart, John

Every firm will need more than one accountant at some point in time--not more than one tax and bookkeeping CPA accountant, but a forensic accountant with a specialty in investigative accounting. This accountant can find the "true" picture of the company's worth when things become muddied. When a fire destroys a business and its accounting system and books, for example, a definitive statement regarding sales and inventory may seem quite impossible, but a forensic accountant can make an accurate statement through such procedures as tracing deposits and sales in bank records and determining inventory through shipping orders. While property loss insurance and business interruption insurance are good to have, businesses must first be able to substantiate losses before any claim is paid. Forensic accounting, also known as investigative accounting, is almost always based on discovering the true picture of a company and is often used when a business is sold, when a business owner gets a divorce, or when business partners split. In all of these instances, the forensic accountant should be called in to provide an accurate valuation of the business to ensure that all sides are fairly treated. The use of forensic accounting can also have a dramatic impact on charges and fines resulting from sloppy or fraudulent bookkeeping, because the accountant can determine that the problem arose from oversight, rather than intentional actions.


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