Forensic accounting is a specialized type of accounting that is done only when there is a litigation or arising dispute and financial report data is required. Forensic accountants are trying to find suitable evidence within the financial statements that can be used in a court of law. Forensic accountants are used in many different categories of cases, including:
- Crimes from money laundering (to trace funds)
- Marital or familial disputes (to calculate incomes, etc.)
- Securities fraud
The accountants are looking closely to the numbers presented on financial statements to see if those numbers match reality. Essentially, the job of a forensic accountant is to provide financial or numerical evidence in court to settle a dispute between two parties. They must have a very keen eye for detail and a good understanding of accounting, as they are responsible for providing facts to the court. Most of the information that could be used as valuable evidence has been well hidden so that it could never be found, so the accountant must be knowledgeable enough to uncover it.