Forensic accounting

Forensic accounting investigates financial records to identify, analyze, and explain evidence that may be used in legal proceedings.

Financial statement analysis: The evaluation of financial statements to assess an entity’s performance, position, and financial risks. Comparisons across accounts and periods can reveal patterns that merit forensic investigation.
Fraud: Intentional deception used to obtain an unlawful or unfair advantage. Suspected fraud is a frequent reason organizations commission forensic accounting investigations.
Financial accounting: The preparation of financial information about an organization for external users under applicable standards. Investigators interpret records created through ordinary financial accounting systems.
External audit: An independent examination of an entity’s financial statements intended to support an audit opinion. A financial-statement audit is not designed to investigate every suspected fraud or irregularity.
Benford's law: A statistical pattern in which leading digits in many naturally occurring datasets appear with predictable frequencies. Digit-frequency deviations can help flag suspicious transaction data for closer examination.
Embezzlement: The fraudulent appropriation of property entrusted to someone’s care. Tracing diverted funds can show how an employee or agent misused entrusted money.
Auditing: The independent examination of financial information to provide assurance against specified criteria. Audits assess reported information; forensic engagements investigate particular suspicions or disputes.
Internal audit: An independent assurance and advisory function that evaluates an organization’s governance, risks, and controls. Internal audit serves organizational oversight, while forensic work often addresses a defined dispute or allegation.
Data analytics: The systematic examination of data to identify patterns, relationships, and anomalies. Large transaction datasets can be screened for unusual payments, duplicates, or hidden relationships.
Money laundering: The process of concealing the criminal origin of proceeds by disguising their ownership or source. Following transactions and beneficial ownership can expose movement of illicit proceeds.

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