An accounting investigation is a specialized form of financial case assignment, usually involving possible cases of fraud or other illegal accounting practices for a company or an individual. Many accounting cases are part of an overall criminal investigation, although some are merely private matters relating to business mergers or other corporate interests.
Obviously, general private investigators are rarely involved in accounting cases, since it takes special skills to be able to decipher financial records and locate any potentially illegal or noteworthy annotations in the ledgers or computers of the investigated person or firm. Most of the time, these cases are handled by specially-trained forensic accountants, although many accounting cases are led by professional detectives.
This essay delves into the role of private eyes in specialized accounting matters.
Accounting Investigation Defined
Accounting is the formal name for financial record keeping. Accountants can hold tremendous power for a company and make it possible of them to profit above and beyond expectation, in reality or through deceptive business recording practices.
A forensic accountant is a specialist in decoding financial records, allowing the person or company conducting the investigation to see the truth of the accounting practices under inspection. These niche detectives are always well trained accountants themselves and often also have an extensive background in law, business, criminal justice and professional investigation.
Reasons for an Accounting Investigation
There are countless possible reasons why a person or company may be subjected to an accounting inquiry. Here are some of the most common case scenarios:
Subject may be suspected of avoiding paying taxes or using fraudulent practices to get out of a tax obligation.
Subject may be using fraudulent accounting to increase the value of their holdings or company in an effort to net more money from a potential sale of the business or asset.
Subject may be undervaluing the actual worth of a company or asset in order to avoid paying fees, taxes or liens, or may be purposefully withholding information which can raise or lower the price of the asset on the open market.
Subject may be investigated during talks of business merger or acquisition.
Subject may be suspected of money laundering, organized crime or other illicit activity which involves deceptive or criminal accounting practices.
Accounting Investigation Information
Accounting cases are rarely commenced by the general public. The majority of criminal investigations headed up against individuals or companies by corporations, law enforcement or the IRS. Many assignments involving forensic accounting are corporate investigation cases dealing with mergers and acquisitions. Some accounting cases are closely related to intellectual property matters or situations in which royalties and residual income is being fought over during litigation. All of these scenarios are complicated legal situations and require expert handling by trained forensic accountants and lawyers.
To learn more about the nature of a particular type of accounting case, or to hire a forensic accounting team to help you with a case of your own, contact a service provider directly or call a private investigation association for a referral to a qualified financial documentation investigator near you.