Forensic accounting procedures for fraud related to purchasing

One of the major rules of a forensic accountant is investigating fraud that happened or might be happened to the organizations.

In this article, we will list down some specific procedures related to Investigating Fraud over purchasing done by Forensic Accountant.

Here we go!

In every organization, the purchasing department plays a very important rule in the business process as almost all of the business operating expenses as well as core operating expenses have to be gone through this department.

Operating expenses are normally majors’ part of expenses in the organizations, and frauds have most likely happened here.

Do so core operating expenses like the purchase of raw materials would also be the highest expenses in the company. All of these two types of expenses are sensitive and fraud would normally happen.

Procedure for Forensic Accounting in Fraud:

If you are performing the Forensic Accounting involve with Investing Fraud in purchasing, the following procedure might help you.

  • Use of computer technique: Computer Assistant Auditing Technique is a very important tool could help you identify some unusual transaction; for example, identifying payment to unauthorized suppliers which made by the accounting or finance department. You can use a list of authorized suppliers for this technique. Fraud might have happened with unauthorized suppliers.
  • Review the price per invoice again the prices provided by the supplier in authorize suppliers list. Doing so you might found some invoices have united prices higher than the authorized price.
  • Reviewing the paid invoice back to the authorization list and back to goods received notes. You might find some invoices paid without receiving goods.
  • Vacant some purchasing officer and replace it with the new one for the specific period.

I hope the above could help you with some ideas to list down your procedures in investigating fraud if you are forensic accounting or Forensic Auditors.

How to Prepare the Forensic Accounting Report? (Guide)

Forensic Accounting Report

Preparing the Forensic Accounting Report is part of your major responsibilities if you are a forensic accountant. This task is normally done at the final stage of your investigation. In this article, we will tell you’re the main element that you should include when you prepare your forensic accounting reports.

Before list down the main element that you should include in your Forensic Accounting Report, we would like to give you some main objective of Forensic Accounting Report. Hopefully, you would have some idea about Forensic Accounting Reports.

Forensic accounting engagements are normally investigated over fraud, dispute, insurance claims, and criminal cases. This engagement normally called by police, lawyer, or the parties in dispute.

Forensic accountant reports normally use as evidence to resolve the case and present to the person seeking forensic accounting service, normally lawyer, the insurance company, etc.

Related: What is Forensic Accounting?

The main elements to be included

1. Executive Summary of Report

Your Forensic Accounting Reports should provide a summary for your reader to make sure that they could get a clear understanding of your reports by not spending a long time. 

The importance of opinion and findings that you found during your tasks and you want your reader to pay attention to should be included here.

Executive Summary should include:

  • Scope of service
  • Objective of service
  • Investigation Approach
  • Summary of Finding ( key Finding)

2. Scope of works in the report

The scope of your forensic accounting works is really important both for you and the party who engage with you. Therefore, have to organize a good scope of work is really important.

Scope of works also helps forensic accountant to prevent and protect their liabilities to the company or other parties in case there are some problems occur. For example, there is fraud depend on the company, but it is of our scope of the accountant.

Make sure you include this in your Forensic Accounting Report.

3. State Findings in Report 

Findings are the weakness, errors, or fraud that you found during the cause of your works. All of the findings should be rate base on the nature of finding, route cause and impacts.

Clearly attach with evidence is really important to empower your findings. Wring the finding should be clear and concise. making sure that the findings are telling the true situation and represent fact.

It probably different from audit findings, forensic accounting findings mostly face data.

4. Provide the Conclusion in the report

All of the forensic accounting reports should have a good conclusion based on the evidence you found during your jobs.

Conclusion: I hope a summary of the Forensic Accounting Report could help you to produce a report. If you have any comments, please drop it below.

Written by Sinra

How to become Forensic Accountants ( Careers and Salaries)?

Forensic Accountants Salary:

Do you want to know about the Salary of Forensic Accountant? Well, in this article we are going to an analyst about Forensic Accountants Salary and their career.

We will also compare the Salary of FA with other accounting jobs like accountant, auditor, or finance.

Before jump to talk about Forensic Accountant Salary, we would like to brief about its career.

As you might know, this job normally works in insurance companies, accounting firms, banking, forensic accounting firm, and sometimes they run their forensic accounting job as free land.

It may also involve in the legal proceeding to assist a lawyer or court in accounting perspective. Yet, they normally required holding good professional qualification.

Related: How to Become a Forensic Accountant?

Salary for Forensic Accountant:

Based on the data showing in Payscale, the salary rank for a Forensic Accountant is $45K to $106K annually. Compare to others, this job is one of the well-paid jobs among the accounting job like an accountant, finance, or auditors.

Among the accounting job, Forensic Accountants got much better paid than others like auditors or accountants.

The reason is this career require deep education in accounting and investigation skill higher that auditor and accountant. 

It might surprise you that most of the Forensic Accountants are move from or experiences with law firms.

They are mostly holding the law certificate and accounting certificate as well. That is the most reason why they got higher pay.

The country that provides a high salary is mostly developed countries like the United States, Singapore, and Australasia, etc.

Task and Responsibilities of Forensic Accountant:

To get this highly competitive salary, the normal tasks for a forensic accountant or forensic auditor are:

  • Reviewing and analysing the financial documents, financial records, and other financial-related documents. The main objective is to gathers all of the relevant evidence. Of cause, doing these things they required to apply their accounting principle, auditing technique, and accounting standard.
  • In some countries, Forensic Accountants are controlled by a professional body or local authorizes. Therefore they must have to make sure that all of the required is done.
  • They also prepare reports and finding they found during their job. They have a presentation about the result of their investigations.

Task and Responsibilities is one part, and to get those good rank of salary, they probably required to hold the professional like ACCA, CPA, CFE, and Certified Forensic Accountant.

Why such qualifications are important?

Most of the employers recognize not only experiences but qualifications. Such qualifications design to provide deep knowledge in accounting and investigation.

All of the members who hold such qualification need also to comply with the code of ethics which is a help to maintain and ensure the qualification of works.

To pursuer such a job, you should at least hold one of them.

Hope this article could help to get some ideas about Forensic Accountants’ Salary, and we could like to wish you the best of luck in this job.

How to Become a Forensic Accountant?

Why?

The forensic accountant is now becoming so popular job in some countries as it is one of the high paid jobs in the accountancy field.

As we normally see, a lot of people who work in this job hold not only professional accounting qualifications with some good knowledge of ingestion skills, but also special investigation skills and experiences. This job is so cool.

This job is mostly employed by a forensic accounting firm or accounting firm like big 4 ( EY, KPMG, Deloitte, and PWC).

Because a Forensic Accountant now is so popular, we have performed the research on what is the main requirement to become a forensic accountant.

The research will guide you kind of qualification, experiences, and technology you need to order to get success on it.

Yet, we do not guarantee if you implement all of these things, you will succeed as the term success is defined differently by different people.

Hold a Professional Degree to Become Forensic Accountant:

Forensic Accountant Job normally requires a good professional degree with special investigations skills. Those accounting degrees include CPA, CIA, CA, CFE (Certified Fraud Examiner) and Certified in Financial Forensics.

However, IT technology now changes quickly and helpful therefore knowledge is mostly used computer applications would help you to get this job.

Now, if you check the website Indeed, you can see almost 100% of the Forensic accountant job requires all the qualification list above. Holding or pursuing one of them will help you at least credit to get attention from the employers.

Assuming there ten candidates apply, and you are one of the withholding one of the qualifications lists above, the chance of getting an interview is quite high for you. As this is the professional, professional qualification got credit better than academics like bachelor’s degrees.

However, if you don’t have any professional qualifications, you should at least have a bachelor’s degree in accounting, financial or related degree in order to get the chance to interview.

In summary, to become a forensic accountant you should have

  • Bachelor in Forensic Accounting
  • Bachelor in Accounting
  • Professional qualification ( CFE, CFF, ACCA, CPA, CIA, and CA

Experiences Required to become a Forensic Accountant:

The things are that most of the job requirements required you to have at least a few years of experiences in real practical accounting like internal audit, external audit, or accountant.

If you have experienced as a forensic accountant job and you want to move up or move out, of cause you have a high chance than others. But if you are a fresh graduate, how can you get the chance?

If you have such experiences, you not only have better credit than others, but you also have some power in negotiating your remuneration.

To summary, the experiences required to become a forensic accountant are:

  • Used to be a Forensic Accountant
  • Use to be an Accountant
  • Use to be Auditor
  • Have a strong analytical skill
  • Have an investigation background

Additional Knowledge and Skills for Forensic Accountant Job:

Knowledge in general business and understand how current fraud practice which normally does by the fraudster. Don’t be confuse, the knowledge comes from many sources like news or articles.

Understanding, Ops no, having the best skill in US GAAP, GAAP, IAS or IFRS is always required by recruiters or employers.

If you want you to be hunted by them, you have to have expertise in these accounting standards. Getting the jobs as a forensic accountant a bit challenging, but existed with high paid. Hope this article helps you.

We are not requesting to commit fraud, we request you to read the articles or news related to fraud.

Stay focus and try to understand more about it is always the best option I believe.

We wish you the best of luck in your career as a forensic accountant job and get the best of pay.

4 Types of Forensic Accounting Services

Forensic Accounting Services might not be so popular in some countries for example in Asian countries. But it is the high pay services in some country like the USA.

In this post, I will list downs in detail about the most popular Forensic Accounting Services often engaged with.

As you may know, most of the engagement that they normally engage with are fraud investigation, partners or shareholders dispute, insurance claims etc. Here are the detail of those 4 Forensic accounting services:

Criminal Investigation Service:

Here is number one. It sounds like FBI, Forensic Accountant also involves the criminal investigation.

Of cause, most people in some country normally though that auditor is the one who performs fraud investigation or criminal investigation, but actually they are not.

And the one who performs criminal investigation is a forensic accountant or sometimes called a forensic investigation.

You probably wonder what this job should be done by the police. And why now we said that it could be done by a Forensic Accountant.

The thing is some kind of job police might need more technical skill like in reviewing the documents, accounting records, accounting documents etc. That is why most of the forensic accounting job need CIA, CPA, or equivalence skill like ACCA or CA.

Dispute Resolution Service:

You might know that in some companies the shareholders have some dispute with each other. And the problems are bigger and bigger lead to hard dispute.

In this case, the engagement with forensic accounting may require to figure out some object involve with the dissolution which majorly requires accounting skill.

Insurance Claim Review Services:

So, forensic accounting’s services do play a very important rule to solve such a problem.

Forensic accounting does play a very important rule related to the insurance claim. Ranking form the low claim, small accident like motor and personnel injure to large claims like fire and aviation.

Sometimes, insurance claim and settlement involve reviewing and checking the financial and accounting records, business performance review if it is involved with a business interruption.

Yes, most of the companies now buy insurance to over its business interruption and if CEO of those companies plays around with insurance companies, it will be the big loss a result of fraud.

Fraud investigation Service:

Fraud investigation is the popular jobs for a Forensic Accountant. This fraud could be started from staff level to management level and from small cash to high-value assets.

There are many other services but I would love to list the last one from my list is professionally negligent.

Professional negligent just simply mean that the person who provides professional service with negligently find out the mistake or fail to do something that the normal professional should do.

As a result of this negligent, someone whose professional liable for, make a loss. To find out whether professional have negligent or not, the company would normally engage with Forensic Accountant.

Conclusion:

The above is the popular 4 Forensic accounting services that normally see in the market. But, in most of the case, the service could be tailor base in the requirement.

Written by Sinra

Forensic Accounting Procedures

Overview:

Forensic Accounting Procedures are not too much different from audit procedures. Those procedures include analytical reviews, inquiries, observations, recalculations,  and inspection etc.

However, as said in our previous post, What is forensic accounting?, the evident gather from Forensic Accounting normally use for legal purpose.

Therefore, the procedure to obtain those evident is more specific and fact rather than assumption.

Inquiries:

It is the importance of Forensic Accounting Procedures. Sometimes a Forensic Accountant requires the officers or personnel who being investigated to be vacant temporary.

This procedure has its own purpose. For example, one the officer investigating is on leave, then his daily job is done by someone else.

During this time, Forensic accountant could be able to notify if there any opportunity that the fraud could have happened. Yet, this procedure does require the corporation from the top management of the company.

Analytical Procedures:

For analytical procedure, Forensic Accountant should always pay very strong caution which to make sure that the data they use for analysis is accurate.

However, sometime the analytical review may not be used to gather data since the result from analytical review is based on the best projection and estimate.

Recalculations, and Inspection:

Inspection of data and records is the most popular procedure to be used in gathering evidence regarding Forensic Accountant’s job.

It just simply means collecting the sample of original invoices, receipts, and other important documents. Then, figure out how much the lost should be or figure out the amount of which item, in this procedure.

Observations:

Before performing some specific testing, of the cause, it is required to understand some specific procure or function and to do so they need to perform actual observations. It is a very important part of FA accountant’s job or FA auditor’s jobs.

Other important things are, they might need some specific information from the person who involves in specific procure like payroll account the one who involve with calculating salary.

Moreover, Forensic Accountant might inquire information from the low level of staff to the top level or from external party if required like banks, suppliers or investors.

In summary, the Forensic Accounting Procedures is similar to audit procedure, but the evident need to be more specific and realistic.

It also involves planning, detail testing, and conclusion, but the conclusion needs to be more specific like how much the fraud or loss.

Of cause, the Forensic Accounting also need to issue the report, but this report going to be used legal purpose or dispute resolutions. This report is different from the audit report.