With the frequency and sophistication of financial fraud growing among a number of businesses in greater Los Angeles and Southern California, it is helpful to clarify the difference between forensic accounting and financial accounting.
The focus of forensic accounting is on uncovering financial fraud, and it is a specialty practice area of accounting that can also include engagements resulting from litigation and disputes.
Reviewed in this article…
…are elements that differentiate forensic accounting from financial accounting including how a forensic investigation leverages and departs from GAAP, FASB, and PCAOB standards and statements.
Unlike financial accounting, forensic accounting is not performed on a routine basis, so it’s important for the owner and the executive management team to know when a forensic accountant is needed or should be consulted.