By Amornrat Sae-Liw, Senior Accounting Manager
Forensic accounting is the investigation of fraud or financial manipulation by performing detailed research and analysis of financial information. Forensic accountants are often hired to prepare for litigation related to insurance claims, insolvency, divorces, embezzlement, fraud, skimming, and any type of financial theft. This article is a quick summary prepared by Amornrat Sae-Liw - Senior Accounting Manager of RSM Accounting Company Bangkok.
“Forensic Accounting” has been in place for over 20 years, although it is still relatively new in Bangkok and Thailand as many people in the Kingdom are not familiar with what it means. It does though have a relatively important role in the criminal justice system in respect of the investigation, collection and demonstration of evidence in economic crime law suits and forensic accountants are engaged as expert witnesses in the courts here though it is not as prevalent as in some other jurisdictions. This article presents the definition and role of a forensic accountant and illustrates the relevance of forensic accounting to combat economic crime and cybercrime.
Preparing for Litigation
You might have heard the phrase “forensic evidence” before, which simply means evidence that is able to be presented in a court of law. Hence, forensic accounting is a term to describe an Analysis of Financial Statements and records that can be used to support a case in a court of law.
The process of digging through all of a company’s or individual’s financial information can take months or even years and requires a team of specialized accountants who act in a similar manner to detectives trying to solve a mystery.
Typically, an accounting firm will be engaged by a client either looking to defend themselves, or looking to prosecute someone. Most medium to large-sized firms have a forensic accounting department, which consists of forensic auditors.
Types of Forensic Accounting
There are several types of forensic auditing and they are typically grouped by the type of legal proceedings that they fall under. Below are some of the most common examples:
- Financial theft (customers, employees, or outsiders)
- Securities fraud
- Defaulting on a debt
- Economic damages (various types of lawsuits to recover damages)
- M&A related lawsuits
- Tax evasion or fraud
- Corporate valuation disputes
- Professional negligence claims
- Money laundering
- Privacy information
- Divorce proceedings
Whilst this article summarized by Khun Amornrat Sae-Liw - Senior Accounting Manager only deals with the very basics of what are the main definitions, should our readers require further clarifications or alternatively be interested in the RSM Accounting Company Bangkok forensic services or any of our other consulting services which include Accounting, Payroll & Tax, please contact Khun Amornrat on [email protected]