What Is Forensic Accounting Used For?
Forensic accounting is not something you hear about everyday. It is actually a hard concept to grasp since forensics is usually dealing with investigations. You may wonder what this type of accounting is used for. It is also commonly known as investigative accounting. Just like it sounds, it is performed to investigate companies and even individuals and their accounting practices and the accuracy of their accounting.Investigative accounting is used for a variety of different things. It can be used in cases of fraud, finding embezzlement within a company and even for simple things such as divorce settlements. At first investigative accounting was not heard of but the founder, Michael Keller, set the wheels in motion and coined forensic accounting.The informational findings from investigative accounting are often times used in court hearings and the accountants performing the investigations are used as expert witnesses. Investigative accounting is much more than analyzing numbers it involves investigating the who, what, why, where, how and when of numbers.Forensic accountants are investigators and answer the questions of who, what, where, how, why and when. They take all this information and form it into a comprehensive report that can be used by different authorities for court cases, company accountability and even divorcees.Are you wondering how forensic accounting got its name and how it was started? Well the founder was an accountant named Michael Keller. He began as an medical claims investigator for the insurance companies. He would research the claims and make sure what was being turned into the insurance companies matched what was actually reported on the books. Many times he had to investigate who did what, why they did it, how they did it, where the charges came from, why they were made and who made the charge.These investigations were not solely performed on accounting so he began calling himself an investigative accountant. People shied away from involvement with an investigative accountant but seemed more respective to a forensic accountant, hence Michael Keller inspired by the television show Colombo reclassified investigative accountants as forensic accountants.Michael Keller was the first forensic accountant and has since paved the way for a whole new division of accountants. Forensic accounting can be a very interesting and challenging field. If you love working with numbers and investigating how things occur then take a challenge and do a little forensic accounting. A field that combines the dynamics of two different fields into one new exciting career.
