"What exactly does a forensic accountant do?” This is a question I’ve heard countless times throughout my career, even from close friends and family who still probably do not truly understand what forensic accounting is. In the broadest definition, a forensic accountant provides an accounting analysis suitable to be used in legal proceedings. To expand on this, the AICPA describes forensic accounting as services that “involve the application of specialized knowledge and investigative skills possessed by CPAs to collect, analyze, and evaluate evidential matter and to interpret and communicate findings in the courtroom, boardroom, or other legal or administrative venue.”(1)
What does this mean? Well, a forensic accountant must be able to analyze any set of data or documentation that is provided and be able to make sense of it. I like to describe our specialty as providing clarity to our clients under uncertain circumstances. We must be able to adapt to the unique needs of a client and their specific situation. In a way, we’re the Swiss Army knives of accounting professionals due to our wide range of skills and the diversity of assignments we handle. One day we may be quantifying the financial losses that damage from a hurricane has caused a hotel as part of an insurance claim. The next day, we’re investigating a suspected employee theft at a car dealership and combing through thousands of paper and digital documents. The day after that, we may be attending a deposition and defending an expert report on economic damages associated with a commercial dispute. Each day of this profession is truly different than the previous one.
Another common question that we receive is “Which industries do you work with?” The answer is all of them. While there may be some industries that we work with more frequently, our skill set applies to any industry or organization universally. Our expertise is in understanding the process of taking raw data and information and translating this into a story that meets the needs of the engagement. We work closely with clients to understand what unique metrics or data is used in their business and then we determine the best way to incorporate this into our work.
Examples of the variety of information we handle include:
Market and competitive set data to help project occupancy levels of hotels and resorts
Raw meat and commodity prices to analyze the profitability of a food processor
Satellite data to track and measure irradiance levels at a solar farm
Monthly rent rolls and tenant ledgers associated with an apartment complex to calculate potential lost rents
Union wage rates and rules in effect for subcontractors onsite at a construction project to estimate costs
To summarize, forensic accountants are called upon to do many things and provide a wide range of services. At RCG, forensic accounting is at the core of everything that we do. We focus on helping clients in all industries with insurance claims, litigation support and general data analytics.
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