Financial forensics refers to the accounting, finance and economic analyses that are prepared in order to assist in the explanation of complex transactions. Special situations such as litigation, arbitration or mediation often require this type of analysis. A financial expert frequently will be engaged by a client (or client’s counsel) to provide forensic services in the context of a dispute. While companies in most industries will utilize financial experts when litigation arises, financial experts typically specialize in a particular area of practice, such as forensic accounting, fraud investigation, business valuation, bankruptcy, or economic damage calculations.
When do Companies use Financial Forensics?
In contentious situations, unforeseen circumstances may lead to lawsuits or other types of disputes over property damages, economic damages, investment losses, wage claims, business valuations, credit analysis results, or income or royalty streams, among many other financial situations. Financial forensics applies a range of methods and procedures that vary from business to business as well as industry to industry. The analyses can be extremely complex due to the large volumes of transactions or records that must be analyzed.
Who are Financial Forensics Professionals?
The professionals involved in financial forensics often are experienced in multiple practice areas, such as corporate finance, valuation, forecasting, banking, investments, asset and liability management, budgeting, auditing, public stock offerings, financial modeling, or real estate-related financial matters. In addition, financial forensics experts may be licensed or certified in a number of areas, since their profession requires a background in various skills and training. For example, a financial forensics expert may be a certified public accountant, an accredited senior appraiser, a certified fraud examiner, a licensed broker, a financial advisor, a certified valuation analyst or a chartered financial analyst, among other designations.
What does the CFF Designation Signify?
The AICPA’s “Certified in Financial Forensics” (CFF) credential is earned by CPAs who specialize in forensic accounting, and is granted to CPAs who demonstrate considerable expertise in forensic accounting, including knowledge, skills, and experience. The CFF professional possesses fundamental and specialized forensic accounting skills that apply in a variety of service areas, including: bankruptcy; electronic data analysis; family law; valuations; fraud prevention, detection, and response; financial statement misrepresentation; and damages calculations.
FGMK’s Experience in Financial Forensics
Finding a financial forensics expert with the experience and skills required for a particular assignment can be challenging. FGMK professionals have been in the business of serving as expert witnesses for over twenty years. Our valuation professionals have valued hundreds of businesses and intangible assets, including for the purposes of damage claims, shareholder disputes, tax controversy, and marital dissolutions. Our forensic accountants and dispute consultants have been involved in the successful resolution of dozens of cases in recent years. FGMK delivers highly skilled seasoned professionals with targeted experience to fit our clients’ exact needs. We take a hands-on approach and our clients enjoy direct access to partners and senior management team leaders on each and every project.
The following points illustrate some of the services that we have performed and the benefits derived by our clients:
- We served as a damage expert in a federal trial involving two equipment manufacturing companies. The trial resulted in a very favorable jury verdict for our client.
- We served as a third, contractually determined, mutually selected valuation firm in a contested ownership buyout involving two prior valuations, resulting in a successful resolution of the dispute.
- We served as forensic accountants for clients defrauded in a major embezzlement scheme, resulting in the recovery of millions of dollars to our clients’ family accounts.
- We served as valuation experts for a transportation company involved in a federal built-in gains tax controversy. Our services resulted in a 99% reduction in the asserted tax liability.
If you have any questions about the role of financial forensics experts, and how they might help you, please contact the ourDispute Consulting, Forensics and Valuation Team.
FGMK is a leading professional services firm providing assurance, tax and advisory services to privately held businesses, global public companies, entrepreneurs, high-net-worth individuals and not-for-profit organizations. FGMK is among the largest accounting firms in Chicago and one of the top ranked accounting firms in the United States. For more than 40 years, FGMK has recommended strategies that give our clients a competitive edge. Our value proposition is to offer clients a hands-on operating model, with our most senior professionals actively involved in client service delivery.
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