Forensic accounting usually begins with a heightened concern that a specific irregularity exists and that it needs to be evaluated, its size determined, and the problem corrected. Additionally, includes a goal to discover evidence that may be instructive.
On one hand, the primary objective of a traditional financial auditor is to render an opinion on the financial statements as a whole free from material error. Forensic accounting investigation, on the other hand, explicitly does not involve financial statements taken as a whole but, rather, focuses on evaluation of transactions, people, or business units to determine whether there are perceived problems that require further action. The focus of forensic accounting investigation on specific transactions or their components generally results in more attention being directed to these elements than is directed to them in the financial statement audit.
The following types of reports are normally prepared by forensic accountant
Report of investigation. This form of written report is given directly to the client, which may be the company’s management, board, audit committee of the board, in-house counsel or outside counsel. The report should stand on its own, it should identify all of the relevant, evidence that was used in concluding on the allegations under investigation.
Expert report filed in a civil court proceeding. These are voluntary declarations of facts and are communicated in written form and sworn to by the witness (declarant) before an officer authorized by the court.