Robust response requires forensic investigators
The Financial Reporting Council (FRC) has decided to build an internal forensic accounting unit and has more than tripled the size of its enforcement team in a bid to demonstrate a “more rigorous approach”. According to the accounting watchdog, it has “invested significantly” in the resources of its enforcement division to enhance its speed and effectiveness.
In this case, the forensic accountants will be used mainly for auditing purposes but there are many benefits to engaging forensic accountants. For example they ensure strong internal controls, such as safeguarding business cash and assets, ensuring the reliability and integrity of financial records and risk assessment.
They can also easily identify areas that are susceptible to fraud through computer forensic analysis. A major advantage of taking on forensic accountants is that, if they independently instructed and there is the slightest risk of fraud, they will always conduct their investigation with the possibility in the back of their mind that they might be called upon to give evidence in a court of law at a later date. Because they are experts in their field and experienced at writing reports that laypeople can understand, their reports carry weight and enable even those with little knowledge of accountancy to be able to form a judgement based on their evidence.
Of course, their evidence is based on facts and what they have found, which is likely to be ‘the big picture’. Therefore those who are accused of financial wrongdoing would be advised to consider the potential benefits of forensic accountancy advice, as they as often as not prove innocence rather than guilt.
Author: Roger Isaacs, 18 December 2017