Skills Needed by Forensic Accountant - Assignment Example

? Forensic Accountant Affiliation Forensic Accountant Introduction Financial crimes are growing day by day, and this has increased the concerns of the policy makers. Due to these crimes, people are losing their hard earned money and those who are already rich are getting richer and the poor ones are getting meagre. Those individuals who are involved in these crimes are not the ones who are poor and aim at getting wealth, these people include those who already have a higher status in the society, and they use their power and authority to ensure that their crimes are never publicized, and they are not penalized for committing such crimes. This scenario has increased the importance of forensic accountants and their accounting activities have helped solve various financial debacles due to which millions of people have lost their wealth. Forensic accounting is even recognized by the name of fraud audit and accounting investigation, this field was created by merging the field of accounting with the field of forensic science (Wells, 2007). Forensic science refers to the investigations that are held to break cases, in these investigations; the employees are involved in analyzing evidence and providing information to the court about their findings. In forensic accounting, accounting science is involved, this means that in case of forensic accounting, financial information is first obtained, and then interpreted and the interpretations are used to break cases that are financial in nature. Skills needed by Forensic Accountant The most important skill of a forensic accountant is considered to be able to communicate well verbally this is because he uses this skill to present his case and his position in front of the judge and the court of law, additionally, he has to deal with victims as well as criminals and his ability to communicate well helps them understand the scenario in a better manner. Forensic accountant should possess the skill of communicating well in written form. This skill falls in the list of the list of top 5 skills because the accountant has to create reports of his findings and have to present them in from of the court. These reports are later on used by other colleagues to understand cases and these reports are even used in educational settings where students need proper reports to understand cases. The second top most skill required by a forensic accountant is the skill of simplifying information. The accountant has to deal with people who are not aware of accounting terminologies, thus it is the task of the accountant to make his findings simple so the people who do not possess the knowledge of accounting terminologies should be able to understand the findings of the accountant. The third most important skill of a forensic accountant is critical thinking skills. These skills are required for the accountant because he has to critically examine the case. He has to think from sides, the victim and the criminal side. His ability to think like a criminal will help him identify the wrong actions taken by the criminal. The fourth most important skill of a forensic accountant is his skill of problem solving. Forensic accountants deal with both novel as well as problems that have occurred previously. His problem solving skills help in solving both these problems. Interviewing skills even fall in the list of top five skills required by a forensic accountant, during his investigation, he has to interview criminals as well as victims and has to locate misleading information and obtain as much information as possible with his interviewing skills. Role of the Forensic Accountant The main task of a forensic accountant is to obtain and then analyze difficult financial information and then summarize that information while making it easy for non-accounting individuals to understand the case and the details attached with it. The accountant is involved in activities such as inspect and analyze evidence that is financial in nature, create applications and software that will help in analyzing information and even for presentation purposes. The accountant is even expected to create reports out of his findings and have to inform about these reports to other members of the criminal justice system with visual and audio aids. His roles are extended outside and within the trial room. In the trial room he acts as an expert witness and provides evidence that are financial in nature. In a court room he is assigned the task of advising before the case proceedings takes place and have to provide evidence before the entire trial starts. He has to figure out what documents are necessary in the case while he is on the defenders end, he works with the lawyer of the defendant during the preparation of the list of documents that will be used in the court room. Next he has to provide reports of his findings in the court and if his reports are not easily understandable, he has to help others in the court in understanding the reports. He even has to analyze the evidence provided by the other party and provide his views about the evidence to the lawyer he is assisting in the trial room (Owojori, 2009). He is even assigned the duty of measuring the impact of an action conducted by the criminal and how the criminal’s actions have affected the environment. He has to inform about the financial losses that have occurred by the act of the criminal, these losses may include: loss of life and property damages. He is even involved in helping the police during investigations; the judge of the court assigns him the task of assisting police officials in their investigations. Where helps them obtain evidence that is financial in nature. Legal Duties to Business Forensic accountants do not only work for government and courts, they are even hired by private businesses. When these accountants are hired by private businesses, they work as experts who do not testify during court room trial. They work as consultants, providing their views about the case a business may be fighting; one of their legal responsibilities is not to disclose the communication that has taken place between them and the business (Emerson, 2005). This legal obligation is not recognized by various jurisdictions, and if a client is directly hiring a forensic accountant, the communication that has taken place between them may be needed to be disclosed if ordered by the court. On the other hand if a business’ attorney hires this kind of expert then the information shared with the forensic accountant is protected. In this case, the forensic accountant does not deal directly with the client, but deals with the attorney of the client and all the information provided to him about the client of business is provided by the client’s lawyer (Ramaswamy, 2007). All the communications that take place under this rule are not protected under the disclosure law. If facts have been provided to the forensic accountant during the conversations, these facts can be disclosed. Another important factor of this legal responsibility is that the attorney may hire the forensic accountant but only for the purpose of legal advice and not for the purpose of helping the business win the case if the business is liable for any wrong doing. The party or the attorney that has hired the forensic accountant has the duty to prove that all the factors were taken into consideration while the accountant was hired and communication that is acceptable by the law has only taken place. While a forensic accountant expert provides independent services to a business or a client he has to comply by the professional duty of due care. He has to analyze the tasks he will be performing as a consultant o an expert witness and he has to ensure that due to his actions, no one is harmed or in other words, his actions are not immoral and unethical. Case Examples Cynthia Cooper working as an internal auditor at WorldCom figured out that the company was cheating and creating irregular accounts in order to cheat their clients and investors. Cynthia along with her other team mates figured out suspicious transactions taking place in the company and went against their assigned tasks to figure bust the fraud. They figured out that the company had manipulated its accounting entries to commit a fraud of $4 billion. Her suspicions were raised when she was informed that the CFO Scott Sullivan had opened an account of $400 million in order to hedge against predicted loss of revenue. She brought this matter in front of other higher officials of the company but everyone asked her to stay out of the matter. Later her team and she figured out that the company had accounted for $2 billion as expenses and these expenses were never authorized by the departments. To unravel the entire conspiracy, Cynthia and her team investigated the computerized accounting system of the company. Later she presented the case in front of the auditing team and this lead to the termination of the CFO and two other employees of WorldCom (Anastasi, 2003). Justice Gomery retained accountants from Navigant Consulting while an inquiry on the Sponsorship Program and Advertising was being conducted; these accountants were hired as forensic accountants (Lee, 2011). A reports about the operations of the program was created and publicly presented during 2005, this report was created by the forensic accountants retained by the justice. The members even acted as expert witnesses as the trial of the commission took place. The forensic accountants investigated the case and they conducted interviews from the key members of the program and were even involved in analyzing and interpreting 28 million documents. The result of the investigation was that the the forensic accountants figured out that $355 million were spent by the program and a certain portion of this amount was paid as bribe to Canada’s Liberal Party. The procedures that the accountants went through during their investigation involved: figuring out the sources of funds to finance the program and summarizing these details, going through contracts and proceedings that were of heights concern, and creating documents of the findings. Conclusion The cases of Enron, WorldCom and various other cases in which accounting fraud was involved have clearly shown the importance of forensic accountants. Forensic accountant’s skills and roles have helped in breaking various financial frauds conducted by some in the corporate world. These cases have clearly helped the public who have invested their hard earned money in companies such as Enron and WorldCom. References Anastasi, J. (2003). The new forensics: Investigating corporate fraud and the theft of intellectual property. Hoboken, N.J: John Wiley & Sons. Emerson, M., & Legalwise Seminars. (2005). Family law: Splitting up the assests : papers presented at a seminar held in Brisbane on Wednesday 24 August 2005. Bondi Junction, N.S.W: Legalwise Seminars. Lee, H. P. (2011). Judiciaries in comparative perspective. Cambridge, U.K: Cambridge University Press. Owojori, A. A., & Asaolu, T. O. (April 01, 2009). The role of forensic accounting in solving the vexed problem of corporate world. European Journal of Scientific Research, 29, 2, 183-187. Ramaswamy, V. (September 01, 2007). New Frontiers: Training Forensic Accountants within the Accounting Program. Journal of College Teaching & Learning, 4, 9, 31-38. Wells, J. T. (2007). Fraud casebook: Lessons from the bad side of business. Hoboken, N.J: John Wiley & Sons. Read More