If you have questions about where some money came from or went to, how can you find out? What if you notice some strange transactions and suspect criminal activity? How can you be sure of what happened? In cases like these, a forensic accounting investigation is the tool you need to discover the truth.
Forensic accounting is a special branch of accounting that specializes in uncovering discrepancies and inconsistencies that may mask tax evasion, money laundering or other criminal activity. There are many potential situations where a forensic accounting investigation may be required. This article will examine the four most common examples.
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Criminal Investigations
All people and organizations who handle money need to track where money comes from and where it is spent. Criminal organizations are no exception to this rule. Many criminal organizations take particular care to make the money they bring in through illegal activity appear legitimate; the authorities call this process money laundering. To uncover this process, a forensic investigator must examine the financial records closely.
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Fraud Investigations
There are many ways to earn money; unfortunately, criminals often find it easier to steal it. A common way to steal money is to convince people to give it to you in exchange for a service or product you provide. When the service or product does not exist or you lie about its value, you are guilty of committing fraud. To uncover fraud, businesses or law enforcement use forensic accounting investigations. These investigations help to uncover who the criminals have taken money from, and where the money was spent or stored.
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Shareholder Disputes
One way for businesses to raise money is to divide the company into smaller pieces known as shares. Everyone who invests in the company gets a certain number of shares. The people who started the business often receive shares representing their investment and stake in the business. Sadly, these arrangements do not always go smoothly; sometimes, there are disputes between shareholders. When the dispute cannot be resolved within the company, other shareholders or law enforcement may conduct a forensic accounting investigation. The goal of this investigation is to determine what portion of the company each party owns, and what the value of this portion actually is.
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Divorce
In the eyes of the law, a marriage is not that different from a business partnership. When a marriage partnership is dissolved, it is called a divorce. Many divorces are settled amicably, but not all of them. When the previous spouses cannot agree on how to divide the property they once owned together, problems may arise. In some cases, a dishonest spouse may attempt to disguise the actual value of the common assets to keep the other partner from receiving what rightfully belongs to them. A forensic accounting investigation can follow the trail of money.
Without forensic accounting investigations, it would be difficult to get to the truth in any of these situations.
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Veriti Consulting LLC provides forensic accounting investigation services for individuals and businesses across the United States. Veriti is also a licensed private investigation agency. To learn more about the types of fraud and forensic investigative services we offer call 855.232.4410 or send us an email.
Read related articles:
- The Role of Forensic Accounting In Divorce
- How To Save Money When Hiring A Forensic Accountant
- Using A Forensic Accounting Expert In A Fraud Investigation