The Legal Responsibility of a Forensic Account While Providing Service to a Business

The legal Responsibility of a Forensic Account While Providing Service to a Business

When you think of accountant, you don’t think of crimes fighters. Well, that’s

exactly what a forensic accountant is. Forensic accountants are frequently engaged to

review insurance claims for business interruptions or lost profits. Business interruptions

(lost profits) insurance is intended to restore the claimants, not reward them with excess

reimbursement. A forensic accountant role in a business interruption can be complex and

difficult. A competent forensic accountant will provide an adjuster, policyholder, or legal

counsel with knowledge and experience. They do not provide coverage interpretation.

This is the responsibility of the adjuster or legal counsel. Forensic Accountants typically

use one or more of the following methods to calculate business interruption losses: (1) the

before-and-after method, (2) the comparable method (or yardstick method), or (3) the

breach-of-contract method.

Forensic accountants often assist in professional negligence claims where they are

assessing and commenting on the work of other professionals. Forensic accountants are

also engaged in marital and family law of analyzing lifestyle for spousal support

purposes, determining income available for child support and equitable distribution.

Some forensic accountants specialize in forensic analytics which is the procurement and

analysis of electronic data to reconstruct, detect, or otherwise support a claim of financial

fraud. The main steps in forensic analytics are (a) data collection, (b) data preparation, (c)

data analysis, and (d) reporting.

Forensic accounting or forensic accountancy has been used since the time of the

ancient Egyptians when Pharaoh had scribes account for his gold and other assets. As an

accountant they must have knowledge of the latest accounting standards and procedures,

be proficient