The risk of data to the forensic accountant & client

The forensic accounting profession is ever changing and evolving. White collar criminals are finding new ways to commit fraud, and litigation matters are becoming more and more complex. In order to meet the needs of clients, forensic accountants are learning new skills and using new techniques.

New Techniques:

 How these new techniques are impacting our reports and expert testimony is now a permanent consideration for legal counsel when retaining a financial professional on behalf of their clients. It is not surprising that the most significant impact on forensic accounting engagements over the past 10 to 15 years is the prevalence and growth in data. There are countless stats on the terabytes of data companies are creating which then lead to the petabytes of data that companies have to store. When an investigation or a lawsuit arises, for example, this repository of data can suddenly become relevant; but, then what?

Questions Arise:

 Many questions arise: What information exists and where? What information is needed? How can the information be obtained? And, is counsel comfortable that they understand how their expert has collected and interpreted this information in reaching their conclusions in important investigative and litigation matters?

The forensic accountant versus data

Data is becoming more and more a part of everything we, as forensic accountants and the lawyers who retain us, deal with on each matter. Part of the Forensic Accountants role in helping legal counsel is to identify, collect, review, and analyze all relevant documentation and present the findings in a way that can be understood by the end user, which, in addition to the client and depending on the issue, may include regulators, other parties to an action and their legal counsel, and the court. These steps are all impacted by the availability, form, and location of that documentation.

Adhere to Standards

Accountants who perform forensic accounting engagements are required to adhere to the Standard Practices for Investigative and Forensic Accounting Engagements (“Standard Practices”). Forensic accountants are required, according to these Standard Practices, to stay within the boundaries of their expertise.

Expert testimony

Expert testimony is where all the work performed by the forensic accountant is truly tested. With any testimony, whether it is an investigation or damage quantification, where there is reliance on data, issues such as how data was captured, analyzed and reported on may be expected to form part of the examination

Conclusion

Data has clearly become a very important consideration in forensic accounting engagements today.

Lawyers, when retaining forensic accountants, need to be actively involved in how data is impacting the

engagement and ultimately, the findings of their expert.  

 Discussion Questions:

1. Why must Forensic Accountants adhere to “Standard Practices for Investigative and Forensic Accounting Engagements?

2. Would you consider a career in Forensic Accounting? Click to Visit the ACFE site to learn more.

3. Do you agree that Data protection is at risk for most businesses?

Article written by KPMG, to read the complete article visit or click :With Great Data comes Great Responsibility