People are fascinated by the term forensic accountant and everyone has an idea of what that is. Unfortunately, there are some beliefs out there that are not entirely accurate. The section below contains common misconceptions I have encountered in my career.
- It is believed fraud examination services are the same as “traditional” auditing services. A typical audit is an examination of an organization’s financial situation to provide assurance that the financial information is stated correctly and can be relied upon. A fraud investigation is conducted because there has been a specific allegation of fraud and wrongdoing. They are not the same.
- Some people believe that any accountant can conduct a financial investigation. A forensic accountant is someone that has knowledge of accounting and experience with litigation support. Traditional accountants do not have this type of experience.
- People believe that fraud investigations are easy. Unfortunately, even when an investigation seems straightforward, there are many details to be verified, checked, and cross-checked. There are always multiple theories that need to be evaluated and explanations are either included or ruled out. All of this takes time and is never easy.
- People also believe I can complete an investigation and answer all their questions along with a report for only a couple thousand dollars. Unfortunately, this is not the case because investigations can run anywhere from $8,000 to $20,000 depending on the tasks that need to be completed. I work with all my clients to set a budget and I am happy to suggest many other ways to keep your costs down.
- Another common misunderstanding is that a client can do the fraud investigation or analysis and the forensic accountant can check the work. A person must have experience and education to do what I do. Checking an inexperienced person’s work can take significantly more time than having an experienced professional do the investigation or analysis in the first place. In addition, checking someone’s work can impair my independence and objectivity.
- I review many types of documentation to find an answer for you. If you do not have documents, there isn’t anything I can do because I cannot subpoena records.
- I have encountered people who believe that I have access to a resource that will let me enter a person’s Social Security Number to obtain a listing of all assets and bank accounts belonging to this individual. Even if this was true, would you want me to be able to look up your information?
- The most common misconception I encounter is the one where people believe a forensic accountant can get their money back. This isn’t true! A forensic accountant will determine where the money went. The attorney is the one that will help you get it back.
