Junell says that forensic accountants collect and analyze accounting and internal-controls evidence. They use this information to produce a fact-based report that can inform the decision-making process in inquiries, investigations and dispute resolution. The by-products of a forensic accountant’s work can include remediation strategies to help a company mitigate and remedy procedural or internal-controls gaps that allowed the underlying issue to occur. Inquiries into accounting and internal controls raise a host of technical issues requiring specialized knowledge that forensic accountants are uniquely positioned to provide. Junell contrasts these areas with that of internal audit, which she believes more often looks at process to determine if it has been adhered to in a procedure. This leads to internal auditors examining evidence to determine whether people followed prescribed processes or internal controls; this occurs, for example, in an operational Sarbanes-Oxley (SOX) or Foreign Corrupt Practices Act (FCPA) compliance audit.
Junell writes that forensic accounting differs from auditing in both its objective and skill sets. The objective of a forensic accounting assignment is to collect, analyze and report on the evidence or facts surrounding a particular act that often has litigious, fraudulent or criminal implications. Auditors also collect and analyze evidence, but an independent auditor’s objective is to attest to the credibility of assertions that are under examination, such as the material accuracy of financial statements for which the audited company’s management is responsible. However, she argues that a key role of the forensic accountant is to identify a concern and to notify company management about the issue or issues discovered.
Via Jim Wesberry