Losing accuracy in a company’s financial books tends to be a cascading problem. When the mistake occurs, it can stay hidden for a long time. Each recording-posting cycle, the mistake and compound, creating more mistakes and so on. Eventually, it becomes serious enough to force a stop and correction. However, the correction step can take a lot of work, a demand that current accounting staff may not have the time or the skill to handle. That’s where professional forensic accountants can make a big difference.

Mistakes Aren’t Limited to Bookkeeping

One of the other frequent problems that can need a lot of back-tracking and detailed review work tends to be tax reporting mistakes. In these cases, a business has filed a tax report that turns out to have mistakes in it. Or, alternatively, the company may have missed a filing altogether. To correct the issue, a forensic accountant team may be needed to reconstruct the filings and their documentation correctly. Once complete, the company can then refile the reports and deal with the related penalties for an incorrect filing.

Taking an Efficient Approach

Once identified, a problem like fraud can take quite a bit of work to unwind. If handled internally, there can be conflicts of interest with employees unwilling to engage proactively and find the full extent of the problem and its damage. With an objective external approach, the internal conflict is avoided, and the review can proceed without biases. Utilizing the standards of a professional forensic accounting approach, not only is the documentation accurately collected to identify the problem, it typically also spells out what needs to be done to apply a correction as well.

Why a Standard CPA Review Doesn’t Work

The fundamental weakness of a generic certified public accountant approach comes twofold. First, the CPA approach utilizes sampling. This is the typical audit examination method, which applies the results of a material sample to the whole. The limitation of this approach, however, is that it is not comprehensive. Secondly, the CPA looks for standard accounting procedures being followed. When fraud or something off the grid happens, it doesn’t follow the rules. Instead, the activity works outside the rules. If the CPA’s exam doesn’t account for novel activity, it may not identify the source.

Both of these problems above are directly addressed by forensic accounting. That’s due to the fact that the discipline assumes intentional wrongdoing from the start. So, it catches the documentation that a generic CPA review could.

Today’s Forensic Accounting is Flexible as Well

Whether needing services in-person or remote, forensic accounting is now available for all types of examinations and transactions. And, with remote online support, the work can be handled 24/7 with around the clock reviews, especially useful when deadlines are short and a sizable amount of accounting needs to be examined. These options didn’t exist some 10 years ago, but today they are definitely available for companies of all sizes.