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How we can trust forensic accountant and to what extent thier efforts will be successful?

Carol Baghdadi's Profile

advantages and disadvantages of forensic accounting

Answers

Sheila Cunha
Title: Controller
Company: Florida Level & Transit Co.
LinkedIn Profile
(Controller, Florida Level & Transit Co.) |

I found this informative article from WIPFLi CPAs which advises you what to look for when choosing a forensic accountant: http://www.wipfli.com/resources/images/16623.pdf

Forensic accounting itself is extremely effective in uncovering defalcations. Just be certain of their experience in the area when you engage them. They are by nature "diggers" and not only will take the time to trace the tedious cash trails; they will have a grasp of reasonableness in industry transactions and tend to look into areas you may not think of.

I can not tell you with certainty the level of success, but I can almost guarantee that they will be able to find the things you are not aware of. Good luck with your audit.

Kim Hall
Title: Consultant
Company: HWG, Inc.
(Consultant, HWG, Inc.) |

I am curious, have you defined success for the company from this project? What is the goal of hiring a forensic accountant? Depending on this you may or may not need a "forensic" accountant. If you are involved in a large court case, then you may want to make sure the accountant meets the highest possible criteria.

For example, a client hired me to review the balance sheet of a subsidiary. What I found was a failed accounting software implementation. As part of the re-implementation, we had to go in and re-construct certain accounts at the time of implementation and then we had to determine the company's financial position at the end of the prior year, then walk the accounting current, closing each period . . . All requiring "forensic" accounting skills, but none of the team was a "forensic" accountant.

Hope this helps.

Best regards, Kim

(Agent, JKS Solutions, Inc.) |

If you are hiring one in conjunction with a suspicion of fraud that you want to investigate, you will want to hire a lawyer and have the forensic accountant work for the lawyer. That way all the confidentiality of the work papers will be respected and you will have all the rules of evidence in place for the prosecution.

You can always not hire an attorney, it would depend on the type of case.

Success would be that they will create a documented trail of evidence that will prove your case against the person you will be prosecuting.

Be sure to ask them if they have expert witness experience and ask them to tell you about what made the prosecutions succeed or fail.

You might want to talk to a couple of litigation service experts and see who they recommend.

Usually at the point you are considering bringing in a CFE, you already know there has been a fraud or you know something is going on and you need an investigator. You probably aren't hiring one just to check out the debits and credits.

Find a couple litigation support practices, some CPA firms do that type of work.

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