Although it's traditionally a skill set that's used to uncover corporate criminal activity, such as fraud and embezzlement, forensic accounting is getting increasingly popular in the private sector. In fact, forensic accounting, both private and corporate, is in higher demand than ever before. According to the American Institute of CPAs, the demand for forensic accountants is up by 20 percent. Surprisingly, forensic accounting even serves a vital function on the domestic front. Following are three instances where the average Joe might need a forensic accountant.
Approximately one third of married people hide money or lie to their spouse about the state of their finances. And while it's illegal to hide assets during a divorce, people still do it in an effort to keep a greater share of the marital assets for themselves. Tactics for doing so include hiding income or assets, understating the value of known assets and overstating the amount of debt owed. In messy divorces where money deception is an issue, a forensic accountant can uncover assets and find areas where deception is present so both parties can receive a fair settlement.
Banks make mistakes, and the cost for these mistakes can be astronomical. In 2007 alone, there were more than 2000 banking errors confirmed. The number of complaints was well over 28,000. Unfortunately, many mistakes go undetected. If someone doesn't understand how to read financial statements and find discrepancies on their accounts, they may never find them. This is especially true if they have a lot of accounts, investments and assets to keep track of. A periodic review or audit performed by a forensic accountant can help discover such mistakes.
Bankruptcy courts often hire forensic accountants to look into the finances of people who are filing bankruptcy. They do so in an effort to find any hidden assets that can be confiscated and liquidated during the bankruptcy. The money obtained by the sale of assets is often used to settle debts. Forensic accountants are also brought in when the court suspects that assets have been juggled or transferred in an effort to prevent them from being taken during the bankruptcy.
As you can see, there are many instances where the average Joe might need a forensic accountant. Their skills are not reserved for the corporate sector only. If you have a private matter involving hidden or misplaced finances, a forensic accountant may be the key to discovery.
For more information, visit http://www.eppsforensics.com or a similar website.