Financial forensics involves analyzing financial information for legal cases, including civil and criminal cases. Experts in this field have accounting degrees and special training to collect and document information correctly for court cases. Financial forensics can be used in civil cases to document circumstances or identify assets, and in criminal cases to investigate fraud and money laundering. Expert witnesses in financial forensics must be able to convey clear information to the jury. Compliance with rules and maintaining the integrity of evidence is crucial.
Financial forensics is the analysis of financial information for use in a legal setting. This can include civil and criminal cases. Experts in this field often have degrees in accounting or related fields, along with special training on how to apply their skills in court cases. The training ensures that people collect and document information correctly, so you can withstand evidentiary challenges in cases that go to court.
In civil cases, financial forensics may be necessary to document the circumstances of a case or provide background information. For example, a company filing for bankruptcy may use a knowledgeable accountant to justify that it has run out of funds, cannot recover under its current operating structure, and needs protection and an opportunity to reorganize. Similarly, financial forensics could be used to identify and trace assets in a case where one party is suing another for payment of a debt or payment of a judgment. The accountant could show that the defendant in the case has assets available and must turn them over to the plaintiff.
Criminal investigations also make use of financial forensics. This may include evaluating records for evidence of fraud, money laundering, and other white collar crimes. Government agencies may use accountants. Financial institutions may hire financial forensics experts to help them with regulatory compliance and audits, with the goal of reducing the possibility of them becoming involved in a criminal case. A bank, for example, might ask for help with an anti-money laundering campaign.
Specialists in this field can support law enforcement and legal teams as they investigate and prepare for cases. In court, testimony is not always required, but it can be helpful. Expert witnesses in financial forensics must be able to convey clear and understandable information to the jury so that they can make a decision. This requires a different set of skills; not all accountants, for example, can explain their profession in terms that laymen understand.
The preparation of materials for the court requires compliance with a series of rules. Evidence must be kept secure, with a chain of custody to ensure it is accounted for at all times. Financial forensics experts must know how to handle data while maintaining its integrity so that evidence is not dismissed on a technicality. For example, if an auditor leaves paperwork on your car seat while you go grocery shopping, the chain of custody is broken and that paperwork can be barred from the court.
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