With the ever-changing, always-evolving modern world comes progress and discovery. But each new technological innovation also invites new ways for people to try to fraudulently use it to their advantage.
Studies have shown that, since the beginning of the COVID-19 pandemic in 2020, online fraud has become more prominent. 76% of all the business owners in the study felt that they had been more exposed to fraud since the pandemic, more than 25% said they had suffered a security breach, and over half of the mid-sized business owners asked had been hit by fraud at some point during 2020.
With fraudsters seemingly on the rise — and your money being more at risk than ever — what options do you have to protect yourself? Well, many business owners and individuals in need have found that the answers lie with forensic accountants.
But what does a forensic accountant do exactly, what can they help you with, and what role can they play in protecting your finances?
What is Forensic Accounting?
Before answering ‘what does a forensic accountant do?’, it may be handy to go over what forensic accounting actually is. Forensic accounting is the process of investigating the finances of an individual or business. Trained specifically to not only look at the numbers, but also the surrounding situation of a business/individual, these specialist accountants provide an accurate level of accounting that is often used in legal proceedings on financial crimes.
It is, in essence, a combination of a traditional accountant and a financial investigator. In most cases a forensic accountant will be a highly qualified and experienced accountant/auditor who will combine their pre-existing expertise with new skills learnt in further formal training to specialise in forensic accounting.
The Role of a Forensic Accountant
Typically, a forensic accountant is brought in to investigate the finances of a person or business in order to provide expert assistance in a litigation.
Their work is extremely complex and generally they will only be called out for the most complicated jobs as a result.
Unlike an auditor, the role of a forensic accountant will be more unique, there is no obvious step-by-step system to follow. It is a more flexible role that requires somebody to be able to pivot to a new approach or angle whenever needed.
Key Forensic Accountant Duties
Getting to the bottom of what a forensic accountant does requires also carefully examining their core responsibilities. The duties of a forensic accountant are both diverse and demanding, requiring both technical expertise and abundant investigative acumen.
Their primary duties include:
- Financial Investigation: Examining financial records in order to identify any signs of irregularity, fraud, or other forms of discrepancies.
- Data Analysis: By utilising advanced analytical techniques, patterns can be uncovered that suggest financial misconduct.
- Evidence Collection: Gathering and preserving key financial evidence to be used in formal legal proceedings.
- Expert Testimony: Strengthening legal cases by presenting findings in as clear a manner as possible in court as an expert witness.
- Report Writing: Creating detailed, highly comprehensive reports in order to document investigative findings.
- Asset Tracing: Following paper trails in order to locate hidden or misappropriated assets.
- Damage Quantification: Calculating the extent of financial losses resulting from fraud or misconduct.
Important Qualities of a Forensic Accountant
The role of a forensic accountant demands more than just being good with money or number crunching, it’s a unique combination of skills that sets them apart from traditional accountants. These qualities of a forensic accountant are essential for success in this specialised field:
Essential Professional Qualities:
- Analytical Mindset: Forensic accountants must be able to see patterns and connections that others might miss, thinking like both an accountant and an investigator.
- Sceptical Nature: A healthy scepticism is crucial — forensic accountants must question everything and assume nothing when examining financial records.
- Technology Proficiency: Modern forensic accounting relies heavily on specialised software for data analysis, requiring strong technical skills.
- Ethical Standards: Given the sensitive nature of their work, forensic accountants must maintain the highest ethical standards and professional integrity.
Communication Skills
Due to the necessity to work collaboratively with others, the role of a forensic accountant requires excellent interpersonal skills. During the course of their job they will be working closely with clients and outside counsel; they will frequently conduct face-to-face interviews, and will need to create in-depth reports to provide evidence of everything they do.
Due to the complicated nature of their investigations, it is important that a forensic accountant is able to plainly and concisely explain their findings with authority and clarity. This is especially true when providing expert testament in legal proceedings.
Detail Oriented
The sheer amount of financial data a forensic accountant is faced with on a day-to-day basis means that they will need to be able to take great care, and have meticulous attention in order to detail and identify any clear anomalies in the findings.
They will also need to be skilled data analysts and collectors, who are capable of assessing collated data and contextualising it to find evidence that will support their hypothesis and findings.
Key Credentials
A good forensic accountant will usually have started out as an accountant or auditor, having likely achieved their Association of Accounting Technicians (AAT) qualification, or alternative foundation financial diplomas.
Once achieving some form of certification, they will then proceed to the professional standard qualifications for their roles, such as ACCA, or CIMA. This will allow them to gain a professional position as an accountant, analyst, or auditor, and from there, after gaining the appropriate amount of experience, they will be suitable to convert to forensic accounting.
Key Areas of Work for Forensic Accountants
The work of a forensic accountant can be highly varied and involve a variety of different practices day-to-day. Forensic accountants can be drafted in to help with nearly any financial issue, and provide an independent view, to offer impartial, expert assistance.
The key areas of work for forensic accountants are:
Criminal Cases
A forensic accountant can be contacted to give a specialist opinion on a financial matter in court in a situation where a financial crime is believed to have taken place. Examples of criminal cases a forensic accountant could be contacted to assist with are:
- Financial Misinformation and embezzlement cases.
- Suspected fraud investigations, including Ponzi schemes, investment fraud, and cryptocurrency fraud.
- Financial crime such as money laundering and corruption.
- Tax evasion and revenue fraud cases.
- Identity theft and financial identity crimes.
Family Matters
Family lawyers may wish to seek the expertise of a forensic accountant, particularly when it comes to matrimonial disputes stemming from assessing earnings and valuing complicated shared assets in the event of a divorce.
The main role a forensic accountant can have in divorce matters is to guarantee total financial transparency for both parties. Their aim is to identify and investigate any possible discrepancies, and attempt to ascertain if there are any hidden assets on either side.
Commercial Disputes
Business disagreements can be complicated and often convoluted processes. This is why the services of a forensic accountant can often be required. Commercial situations that could require a forensic accountant are as follows:
- Disputes between shareholders
- Breaches of contract
- Business valuation
- Misappropriation of funds
- Loss of profits
Insurance Claims
A forensic accountant may be contacted to assess the loss of earnings in an insurance related matter or business interruption claim.
How Much Does a Forensic Accountant Cost?
One of the most common questions business and individuals ask is “how much does forensic accounting cost?” The answer will generally depend heavily on several factors, including the complexity of the case and how time-intensive it is. Understanding these factors and their impact on the costings is key when considering whether to engage these specialist services.
Factors Affecting Forensic Accounting Costs:
- Case Complexity: Simple asset searches may cost significantly less than complex fraud investigations involving multiple jurisdictions and extensive data analysis.
- Time Requirements: Forensic accounting fees are typically charged hourly, with rates varying based on the accountant’s experience and the case complexity.
- Scope of Investigation: The broader the investigation scope, the higher the overall cost will be.
- Geographic Location: Costs can vary significantly depending on your location and the local market rates. This also applies if your situation requires multi-jurisdictional needs.
While the cost of forensic accounting can sometimes be significant, the potential upside can be incredibly valuable. Many forensic accountants offer initial consultations to help you better understand the potential costs specific to your situation.
The Value of Professional Forensic Accounting
What does a forensic accountant do that makes their service so valuable? Beyond their technical skills, forensic accountants also provide peace of mind and professional credibility that can prove crucial in legal proceedings. Their independent, expert analysis can make all the difference between success and failure in financial disputes.
The role of forensic accountants continues to evolve each year, with technology advancing and increasingly sophisticated financial crimes being implemented in turn. As fraud becomes more and more complex, the duties of a forensic accountant expands to now include cyber-forensics, cryptocurrency investigations, and analysis of digital evidence.
Frequently Asked Questions About Forensic Accounting I Often Receive
Why is forensic accounting a growing field?
Financial crime is becoming more sophisticated, and regulatory requirements are stricter than ever. Businesses face complex fraud risks, from cybercrime to internal theft, while courts increasingly require expert financial evidence in litigation. The rise of cryptocurrency and digital assets has created entirely new areas where forensic accounting expertise is essential.
As economic pressures increase, so do financial disputes — whether commercial disagreements, matrimonial cases, or regulatory investigations. Forensic accountants provide the specialist skills needed to navigate these challenges, making it one of the fastest-growing areas in professional services.
Why is forensic accounting important?
Forensic accounting protects businesses and individuals from financial loss by uncovering fraud, quantifying damages, and providing court-ready evidence. Without it, hidden assets go undetected, fraudsters escape accountability, and victims lack the proof needed to recover losses or defend themselves in litigation.
In commercial disputes, forensic accountants establish the true financial position when parties disagree. In matrimonial cases, they ensure full disclosure and fair division of assets. In criminal matters, they trace proceeds of crime and challenge prosecution evidence. The importance lies in achieving outcomes based on financial truth, not incomplete or manipulated information.
How much does a forensic accountant cost?
Fees vary significantly depending on the complexity and scope of work required. Rates typically reflect the specialist expertise and detailed analysis involved. However, the cost of not instructing a forensic accountant often far exceeds the fees. Hidden assets worth hundreds of thousands can be uncovered, fraudulent claims can be defeated, and unfair settlements can be avoided. In most cases, the financial benefits (whether through recovery, protection, or achieving a fair outcome) significantly outweighs the cost of instruction.
How does forensic accounting work?
Forensic accounting combines investigative techniques with financial analysis. I start by understanding what questions need answering: whether that’s tracing hidden assets, quantifying losses, or challenging financial claims. Then I gather and examine financial records: bank statements, company accounts, transaction histories, and any other relevant documentation.
The analysis involves reconstructing financial trails, identifying irregularities, and establishing what actually happened with money or assets. I document findings clearly and provide expert reports suitable for court proceedings or settlement negotiations. If the case goes to trial, I provide expert witness testimony explaining complex financial evidence in terms judges and juries can understand.
How can forensic accounting help my business?
Forensic accounting protects your business in several ways. If you suspect fraud, whether by employees, suppliers, or business partners, forensic investigation can uncover the full extent of losses and identify how it occurred. In commercial disputes with customers, suppliers, or shareholders, forensic analysis establishes the true financial position and supports your legal case.
For businesses going through partnership dissolution, shareholder disputes, or sale negotiations, forensic accountants ensure accurate valuations and prevent hidden value being overlooked. We also support businesses facing regulatory investigations by reviewing financial records and preparing evidence that demonstrates compliance or challenges incorrect findings.
How do I find a good forensic accountant?
Look for chartered accountants with recognised forensic accounting qualifications and memberships in professional bodies. Experience matters. Ask about their track record in cases similar to yours, whether commercial disputes, matrimonial work, or fraud investigations.
A good forensic accountant should explain complex financial matters clearly, provide realistic assessments of what can be achieved, and have experience giving expert evidence in court if your case requires it. Ask whether they handle cases personally or delegate to junior staff: complex work benefits from senior expertise throughout. Finally, ensure they understand your specific industry or the type of financial issue you’re facing, as specialist knowledge makes a significant difference to outcomes.
Why You Can Rely on Inquesta Forensic
Inquesta Forensic’s expert forensic accountant, Rob Miller, has 20 years’ of experience providing our clients with expert forensic accounting services — from marital issues, to personal injuries, to commercial disputes. We understand that no two cases are the same, this is why we go into everything with a fresh mindset.
Our expert team will leave no stone unturned, they are specialists at providing guidance, support, and deep dives into the numbers and finances in any situation.
Able to offer an all-encompassing service, we aim to always put the needs of our clients above all else and get you the best result possible.
The Inquesta Forensic team specialises in providing top-rate services in all areas of forensic accounting. For further support and information on what Inquesta Forensic can do to help you, contact us today.
