The CPA's role in forensic accounting

Name:
Instructor: Course: Date of submission:
The CPA’s role in forensic accounting
There is increased interest on forensic accounting in view of fraudulent activities that have taken place for long without detection. Consequently, CPA’s have a role in aiding fraud investigation, with most fraudulent cases involving manipulation of accounting information. Embezzlement of funds is widely known beyond business circles as one of the main form of fraudulent activities. However, there are other types of frauds including omissions, bankruptcy fraud, false billing, tax evasion tactics that extend to illegal repatriation of funds to tax havens. Misrepresentation of material facts is typically the first indication of fraud (Krstić 296). Since CPA’s have knowledge on accounting and financial information, they recognize, retrieve, protect and report on relevant information during forensic investigations.
Allegations of possible fraudulent activities typically call for CPA’s to look into such matters before instituting investigations. If allegations turn out to be true, then organizations need to liaise with the audit committee and audit departments. Nonetheless, forensic accountants and CPA’s work together in such situations. CPA’s also assist in forensic accounting, as they examine credibility of accounting information because of their knowledge of AIS. They may also provide crucial information to assist during forensic accounting investigation in identifying material information that may be overlooked by management. Thus, in case there are possible delays in audit opinions CPA’s collaborate with auditors to avoid putting at risk forensic accounting investigations.
The relevance of CPA’s in forensic accounting is also evidence that they can also identify elements that increases likelihood of fraud. Essentially, these elements include rationalization, motivation and opportunity. Fraud perpetrators typically try to hide their tracks, but since CPA’s deal with accounting info...