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How Can Accountancy Help With The Fraud Problem?

     The definition of fraud can be very variable. The word can even be used to describe people who are not sincere. But commonly it is assets being stolen and this is normally described as theft. Deceiving the victim is a common characteristic of such crime, and this deception will normally take place amongst the accounting records containing all the numbers.

Therefore, it would seem that the most valuable skill that a fraudster can have is accountancy! The ability to falsify accounts is an essential skill of the business crime practitioner. Preparing false accounts, using multiple shell companies and laying deceptive trails when laundering the proceeds of crime is commonplace within serious frauds. However, this also means that the most effective tool against fraud is also accounting techniques. It is the tool that is needed to unravel the trails of deception and false fronts put in place to cover up the criminal activity and hide the stolen funds.

A fraud accountant is one who works on accountancy records involved in a financial crime. A forensic accountancy expert is another name for such a person. Such a person must be a qualified and experienced accountant. Instead of specialising in some normal area of accountancy such as auditing or tax, the forensic accountant must be capable dealing with all areas of business and corporate activity, together with being familiar with personal accounting and taxation issues. Any situation where financial transactions are recorded can demand the expertise of such a person.

Very often there are errors in accounts, intended to fool others into thinking things are as they should be. The errors may cover up large losses within a business. They may cover up fraudulent activity being conducted by a business. The fraud accountant must analyse the figures, see how they should be presented and trace any losses in order to support attempts being made to recover them.

If the matter goes to court, or some form of tribunal, the fraud accountant must become an expert witness often in criminal defence cases. Then he must show any findings in a non partisan way to help the court decide on various matters before them.

It is not just accountancy skills that are needed for this work. A financial forensic specialist must be able to understand the points of law. This is so the work he carries out can be focussed correctly in the right areas. In order to obtain vital information from persons involved, he or she must have credible interviewing ability. Frequently he may be requested to attend interviews of suspects by the police. Such a fraud specialist is able to understand often complex accounting responses and guide the questioning appropriately.

In short, the forensic accountant specialising in fraud must be a jack of all the appropriate trades! beeing able to understand the accounting issues is a prerequisite. He must have legal skills, police investigation skills, evidence handling skills and general business acumen. This makes for a challenging and rewarding profession in this current day and age that places more and more emphasis on finance.

Article Source:

Mark Jenner is a fraud accountant who specialises in forensic accountancy and proceeds of crime cases. He is a Fellow of the Institute of Chartered Accountants, a Member of the Expert Witness Institute, a Certified Fraud Examiner and has a Masters Degree in Fraud Management. He assist victims of fraud, criminal defence lawyers and fraud regulators.

Posted on 2012-01-06, By: *

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Note: The content of this article solely conveys the opinion of its author,

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