FORENSIC
ACCOUNTING
fo·ren·sic
Relating to or denoting the application of scientific methods and techniques to the investigation of crime. The results of a Forensic investigation are "suitable for use in a court of law", and it is to that standard and potential outcome that forensic accountants generally have to work.
Most business-minded people are familiar with an accounting audit which looks at the business performance and compliance from a numbers and process perspective. Forensic accounting is a little different. It considers motivation, particularly the motivation employees or business partners may have to defraud your business.
Forensic accounting and investigative accounting are closely related fields within accounting, both focusing on examining financial information in detail. However, they serve different purposes and employ distinct methodologies:
Primary Focus: Providing evidence for legal cases.
Methods Used: In-depth analysis of transactions, asset tracing, preparation of reports suitable for court, and testifying as expert witnesses.
Applications: Civil and criminal cases, such as fraud investigations, divorce settlements, insurance claims, and financial disputes.
Investigative accounting, on the other hand, is more exploratory and aims to uncover financial discrepancies or irregularities that may or may not lead to litigation. It involves following financial trails to identify suspicious activities and inconsistencies, though the findings are not necessarily intended for use in court. Investigative accountants often work to uncover the "what" and "why" behind financial discrepancies.
Primary Focus: Detecting and understanding irregularities in financial data, which may inform business decisions or uncover internal issues.
Methods Used: Analysis of transactions and records, background checks, and review of internal controls, often with a focus on identifying the root cause of irregularities.
Applications: Internal audits, fraud detection within organizations, and pre-litigation inquiries to determine whether a full forensic investigation is needed.
In essence, forensic accounting is a subset of investigative accounting focused on legal preparation. While investigative accounting emphasizes discovery and understanding, forensic accounting emphasizes evidence presentation for judicial processes.
Forensic Accounting encompasses two areas:
Litigation Support:
Litigation represents the factual presentation of economic issues related to existing or pending litigation. In this capacity, the forensic accountant quantifies damages sustained by parties involved in legal disputes and can assist in resolving disputes before they reach the courtroom.
If a dispute reaches the courtroom, the forensic accountant may testify as an expert witness. Knowledge of the courtroom sets the forensic accountant apart from a typical accountant.
Investigation:
Investigation is the act of determining whether criminal matters such as employee theft, securities fraud (including falsification of financial statements), identity theft, or insurance fraud have occurred. Investigation may also occur in civil matters. A forensic accountant may be hired to search for hidden assets in a divorce case.
While forensic accounting and fraud auditing are related, fraud auditing is more anticipatory. Fraud auditors try to control a situation before something happens, whereas a forensic accountant may be hired after the fact. A forensic accountant is usually hired after a company suspects theft, fraud or embezzlement.
Forensic accountants are suspicious. They must be able to apply their accounting knowledge to legal issues. A forensic CPA will be asked to write expert reports, assist in depositions, testify as an expert witness, conduct fraud investigations and assist in civil and criminal investigations.
Apollo's forensics accounting and investigations team helps companies uncover the facts related to fraud, misconduct or impropriety. We provide a range of solutions to discover, collect, interpret and present findings from disparate and hard to decipher information sources to help companies manage the risks of litigation, investigations and regulatory enforcement.
ApolloLTD helps companies address, mitigate and minimize future issues related to improper accounting or financial reporting, ranging from revenue recognition to loss reserves, to disclosures. Our team has extensive knowledge of relevant financial reporting standards including generally accepted accounting principles (GAAP), international financial reporting standards (IFRS), and experience with Securities and Exchange (SEC) regulations and investigations, and industry-specific reporting and disclosure rules.
Special Forensic Services We Provide:
Financial Restatement Support
Apollo assists companies undergoing restatements in a variety of ways including acting as a project management office to coordinate the restatement, providing technical accounting support on GAAP issues, providing staffing to supplement existing resources, documenting the restatement for external and internal stakeholders in whitepapers, and assisting in interfacing with external auditors, counsel and other key stakeholders.
New Accounting Pronouncements
Apollo can provide policy level as well as tactical implementation assistance to assist companies in adopting new accounting pronouncements. We assist in reviewing and revising internal controls, accounting policy manuals, and providing training on new accounting considerations, in addition to providing additional resources to allow for timely and effective adoption of the new pronouncement.
Post-acquisition Support
Apollo can assist in the initial recognition and subsequent reporting for purchase accounting transactions through providing guidance on the technical GAAP, and providing assistance in valuing the tangible and intangible assets acquired.
Internal Controls Support
Companies often need additional expertise to evaluate how internal controls address critical risk factors. Apollo can provide an independent review and assessment of your internal control structure. Subsequent to such a review, we can develop a remediation plan, based on our past experience, ensuring that your control structure addresses critical risk factors. We can also oversee and monitor the implantation of the remediation plan or act as an independent consultant.
Technical Accounting and Financial Guidance
Apollo can provide assistance in understanding and applying GAAP to complex fact patterns; developing whitepapers setting forth company positions on GAAP application and assist in responding to SEC comment letters; interfacing with external auditors at the client service and national office level; and presenting company accounting positions in regulatory inquiries, including to the SEC.
Management Support
Apollo personnel have experience working with and as financial accounting executives. As such, we can provide senior management and the board of directors with practical advice in addressing accounting matters, performing internal investigations and interacting with external stakeholders, such as a company’s independent accounting firm and regulators.
We combine deep investigation consulting skills, forensic accounting expertise, and industry experience to help companies effectively respond to inquiries and navigate compliance. We bring together former law enforcement officials, prosecutors and regulators, forensic accountants, computer forensics specialists, litigation support professionals, and industry experts to support companies and their legal counsel.
Our Forensic Accounting Division is dedicated to uncovering financial truth with precision, integrity, and expertise. We provide comprehensive investigative services to identify, analyze, and resolve complex financial irregularities. Committed to transparency and accountability, we partner with our clients to safeguard their assets, restore trust, and support informed decision-making in legal and regulatory environments. Through innovative methodologies and unwavering professionalism, we deliver insights that empower justice and drive financial clarity.
Clients choose our firm because we combine unmatched expertise with a commitment to delivering clear, actionable results. Our forensic accounting specialists bring years of experience, advanced investigative techniques, and a meticulous attention to detail to every case. Whether uncovering fraud, resolving financial disputes, or supporting litigation, we prioritize integrity, accuracy, and discretion. By tailoring our approach to the unique needs of each client, we ensure comprehensive solutions that stand up to scrutiny. When clarity, trust, and precision matter most, our firm is the partner you can rely on to illuminate the truth and protect your financial interests.
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