DEFINITION of ‘Financial Forensics’
A field that combines criminal investigation skills with financial auditing skills to identify financial criminal activity coming from within or outside of an organization. Financial forensics may be used in prevention, detection and recovery activities to investigate terrorism and other criminal activity, provide oversight to private-sector and government organizations, and assess organizations’ vulnerability to fraudulent activities.
BREAKING DOWN ‘Financial Forensics’
Financial forensics is similar to forensic accounting, which utilizes accounting, auditing and investigative skills to analyze a company’s financial statements for possible fraud in conjunction with anticipated or ongoing legal action. Forensic accountants may also work with government agencies, including tax authorities, to recover illegally obtained funds or help prosecute money laundering. Forensic accountants can also help companies design accounting and auditing systems to manage and reduce risk.