What it is:
Forensic accounting is a form of investigative accounting which examines financial records in order to find evidence for a lawsuit or criminal prosecution.
How it works/Example:
Forensic Accounting is sometimes referred to as forensic auditing.
Forensic accounting integrates an understanding of accounting principles with investigative techniques to determine whether the actions behind financial records and statements are suspicious.
Individuals certified to perform forensic accounting produce findings used in legal proceedings concerning fraud, embezzlement and financial disputes.
Why it matters:
Forensic accounting is a valuable investigation technique that allows information found in a company's financial statements and transactions to be presented in a way that is suitable for court.