Forensic accounting & Auditing
Forensic accounting refers to accountancy work that results from actual or expected legal cases likely to be heard in a court law. The work may be done to help provide evidence to help the resolution of a court case or to help settle a dispute.
Forensic auditing more specifically refers to the gathering, analysis and reporting on data (i.e. an audit) in situations that have legal consequences. As with all audits, pre-agreed context/set of criteria will be set against which the auditor will report.
Typically forensic work will:
- Require the auditor/accountant to appear in court to explain their work and findings
- Require absolute objectivity, with no ethical threats whatsoever
- Involve zero materiality (i.e. very detailed)
- Create confidentiality issues (as disclosure during the court case may be required)
- Have reputation implications, especially in a high profile case