Types of forensic accounting engagements

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Forensic Accounting aims to highlight any accounting or legal violations, regulatory deviations or contractual breaches through ascertainment of facts and discovery of evidences suitable for a Court of law. The focus area is critical examination of transactions, funds and balances in the books of account or with third parties.

There are different types of forensic auditing engagements that can take place. They are typically grouped by the types of legal proceedings that they fall under. Below are some of the most common examples:

  • Financial Statement manipulations
  • Diversion of the funds
  • Anti-Money laundering
  • Investigations in mergers and acquisitions
  • Investigations into Tax Evasion
  • Investigation of Related party transactions
  • Valuations and Estimations of losses or damages
  • Investigation of Suspicious transactions under Insolvency and Bankruptcy Code

Besides the above mentioned types of engagements there are some assignments which are purely in the form of investigations. Additionally, the purpose of the Investigation is to examine facts and circumstances and additionally,  discover evidence to prove or disprove hypotheses formulated regarding alleged legal violations, unethical conduct or the possibility of a fraud by suspected individuals.

  • Financial Fraud investigations
  • Investigation of Cyber frauds, hacking and malwares
  • Insurance or Personal injury claims
  • Ethical or Code of Conduct violations
  • Whistle-blower complaints
  • Prevention of Sexual Harassment related allegations
  • Asset theft or Bribery or Corruption
  • Data breach or theft of Intellectual Property

Therefore, the forensic accountants also Provide testimony in a Court of Law, based on
investigation expertise to help facilitate some resolution to legal disputes based on facts/circumstances and investigation expertise and they may be summoned to court of laws as the expert witness.