Forensic accounting is the specific type of accounting that involves
the use of accounting knowledge and principles for performing
investigation activities in order to locate evidence of crime or fraud.
Forensic accountants rely on a diverse range of data and information
for conducting in-depth analysis and assessment. For identifying the
key issues that may exist in a situation, it is essential for forensic
accounting engagement to ascertain the particular type of data that
they need to gather so that they can investigate a matter in an
integrated manner. Some of the chief factors that come into play and
determine the type of data that must be analyzed in a forensic
accounting engagement are the appropriateness of data to the
specific scenario that is being investigated and the alignment of the
data with the analytical needs of the forensic accountant. The data
that is collected must have a purpose in the specific situation so that
it can add value to the investigation and analysis process. Forensic
accountants possess the skills and capabilities that help them to look
beyond numerical data and uncover below the surface to capture
evidence indicating criminal activities (Wijerathna & Perera, 2020).
A forensic accountant has to be sure that he has access to sufficient,
relevant as well as reliable data that will aid in the investigation
process. In order to be sure about these aspects, it is essential for a
forensic accountant to give due importance to the authenticity of the
source from where the data is collected and the application of
appropriate methods for collecting the data so that the data that is
ultimately available is comprehensive and accurate. While gathering
the data, it is necessary for forensic accountants to make sure that
the data that has been collected adheres to the requirements that
have been laid down by Generally Accepted Accounting Principles
(GAAP) or International Financial Reporting Standards (IFRS). The
data that has been gathered needs to be verified by making a
comparison with varying sources (Afriyie et al., 2022). For instance,
important individuals that may have an insight into the data that is
being collected may be interviewed, or analytical procedures need to
be carried out to ensure the reliability as well as the correctness of
the data. A forensic analysis needs to adhere to appropriate ethical
and legal requirements so that there can be higher assurance
regarding the quality of data that can add value to forensic
investigation engagement.
Reference
Afriyie, S. O., Akomeah, M. O., Amoakohene, G., Ampimah, B. C.,
Ocloo, C. E., & Kyei, M. O. (2022). Forensic accounting: a novel
paradigm and relevant knowledge in fraud detection and prevention.
International Journal of Public Administration, 1-10.
Wijerathna, A. G. H. S. K., & Perera, H. A. P. L. (2020, November). A
systematic literature review on forensic accounting. In Proceedings of
the International Conference on Business & Information (ICBI).
