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! To be numerate and be able to manipulate accounts seems to be an essential attribute of the white collar criminal. False accounting, using many holding companies and adding extra layers of transactions to launder criminal proceeds is very common inside complex frauds. This means that the strongest tool in the fight against the problem must also be accountancy. 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. It is necessary for this sort of person to be a suitably experienced and qualified 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. Losses may be covered up by the errors inside 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. He must then present his findings in an independent and impartial fashion to assist the decision making process of the court and hopefully ensure that justice is carried out.

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. The reason for this is so that the work carried out can be directed to the correct 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! Being a competent accountant is taken for granted. He must have legal skills, police investigation skills, evidence handling skills and general business acumen. It does make for a rewarding profession, providing challenges and variation on a daily basis.

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Mark Jenner is a fraud accountant who specialises in fraud investigation and criminal defence 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. His website can be found at =>http://www.mark-jenner.com

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