As a forensic accountant, the types of data that one must gather would depend
on the type of engagement. A forensic accountant could be tasked with
performing valuations and estimations of losses or damages, investigating related
party transactions, mergers and acquisitions and of course financial fraud. The
three general rules to adhere to ensuring sufficient, relevant and reliable data are:
1) Data is based on sufficient facts or data, (2) the data is the product of reliable
principles and methods and (3) lastly the principles and methods have been
applied reliably to the facts of the case (Rufus, i.e.).
How much and what type of data that is to be acquired would depend on a lot of
factors, such as how strong the internal controls of the organization are,
availability and consistency of the data and the degree of cooperation of the client.
When conducting a forensic accounting or fraud examination, it is all about the
data! How do we prove fraud exists? We gather information, data. We use this
data to conduct our analysis. However, what determines the types of data that
you will analyze? How do you validate data once you gather it? Is data from third
parties more reliable than data received directly from the client? When responding
this week, also think about how the forensic accountant would keep the data
secure.
References:
Rufus, R., Miller, L., & Hahn, W. (2014). Forensic Accounting. Pearson Education
(US).
