Using Financial Forensics in Criminal Fraud Cases ~ The International Finance

Friday, 28 September 2012

Using Financial Forensics in Criminal Fraud Cases

The financial forensics specialist is a combination of investigation, auditing, accounting and analysis in one individual. Often, a forensic specialist employed by a law enforcement agency also has legal training. This field is focused on using evidence that is found in financial documents, files and related activities in proving criminal cases. The related activities are used to determine where funds that have been hidden or misappropriated have been deposited.

Because financial forensics involves analyzing pertinent data in a legal setting, it can also be used in civil and criminal cases. Those involved in this type of work usually have a degree in accounting and are trained in using their expertise in court cases. Requiring this background ensures that information will be properly collected and documented, and will hold up in court during a trial as well.

Financial forensics is sometimes needed in civil cases to provide background information or verify the facts that are presented during a trial. For example, a business that plans on declaring bankruptcy could use an experienced accountant to show while it is no longer solvent and unable to recover with its existing operational structure, and is thus seeking an opportunity to reorganize. Or in another example, when one party sues another for payment of some kind, financial forensics might be a way to identify and locate the assets in question. In this situation, an accountant could show that party being sued actually has assets and should pay the plaintiff what is due.

In a criminal investigation, financial forensics may include evaluating records to find proof of money laundering, fraud and other so-called “white collar” crimes. Financial institutions and government agencies employ financial forensics experts to assist them with audits and compliance with the law and lessen the possibility of their involvement in a criminal trial.

As they investigate cases and prepare to go to court, those who specialize in financial forensics often support legal teams and law enforcement. While they do not always testify in court, there are times when they are called on for sworn testimony in front of a jury. At that point, their task is to provide the jury with information in a clear, coherent manner in order to reach a verdict when fraud or some other crime has been committed.

Note that the material prepared for court has to meet a set of established standards. For example, the evidence must be stored safely and should be accounted for in any circumstances. Financial forensic experts must be adept at handling information without risking its integrity, so it won’t be declared inadmissible based on a technicality.

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Amit Singh is a founder of Theinternationalfinance.com he share his immense knowledge of Finance in this blog.

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