However, forensic accounting is different from audit because it is done upon request by a client. Forensic accountants work in both the private and public sector. They do not just help business owners but also individuals who need the services. This article takes a look at the times you might need the services of a forensic accountant.
When getting a divorce
Divorce boils down to splitting marital assets and debts. However, it is not always as simple as it sounds especially when a couple has complex financial portfolios. In many marriages, one spouse plays the role of money manager leaving the other party at a disadvantage because they do not have complete knowledge of their financial health. The money manager might also attempt to hide some assets including cash, mutual funds, stocks and annuities. The role of a forensic accountant in Chicago is to locate these hidden assets so the divorce can be on a level ground.
When taking over another person’s finances
There are some situations where you take over another person’s finances such as when an elderly relative is no longer capable of keeping track of their financial situation. However, taking over a person’s finances can be a complex undertaking even if they try to explain all the details. You can bring in a forensic accountant to appraise you on the details of their finances.
When purchasing a business
Acquiring a business does not just happen once. It is a huge investment that can drain your finances. It usually happens in different phases until the two parties both the seller and the buyer reach an understanding on the financial terms for the transaction. However, one of the most important phases of a business acquisition is the due diligence phase. In this phase the potential buyer is able to conduct a comprehensive analysis of the business. A forensic accountant will ensure the business is accurately valued and that you buy at the right price.
When you suspect fraud or a business partner is stealing from you
If you run a business, you are aware that it is close to impossible to run the business without the help of an employee. However, an employee can commit fraud and hide it from you especially if you are not so involved in the running of the business. Also, if you have a partner when starting the business and you suspect they are stealing from you or siphoning the company’s funds, you can hire a forensic accountant to uncover the truth.
There are other situations where a forensic accountant can help such as when you are looking to divide up your assets in a tax efficient way. They will assist you in being tax efficient while still staying within the law. It can also help your business to save costs and increase your profit margins.