Forensic Accounting : A Relatively New Field

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While accounting has always been widely practiced, forensic accounting is a relatively new field. Forensic accounting is the use of accounting to extract information from financial documents to prove fraud or embezzlement in the court of law. It involves identifying, recording, and extracting financial data while using a variety of direct and indirect analysis methods. In recent years, the profession has gained attention for its role in stopping both terrorists and corporations from acting unethically. After 9/11 the FBI and Department of Justice created the Terrorism Financing Operations Section which was composed of forensic accountants to conduct a thorough analysis of the financial support structure of the 9/11 hijackers …show more content…

Sadly, this has done little to prevent money laundering from occurring. Terrorists often receive funding through charities, small businesses, governments, and coercion which at times circumvents the Bank Secrecy Act. Ultimately, financial trails are left and can be traced by forensic accountants.
Forensic accounting procedures can be applied regardless of how the money flow is executed and can be implemented in money laundering investigations and terrorist activities. Those who launder money are similar to terrorists in that they act illegally to rationalize their behaviors and have financial pressure to act in that manner (Grubor). When these conditions are present, it raises a red flag for investigators who then contact a forensic accountant for further examination. Oftentimes, terrorists and money launders act under the veil of a business. When describing a business, this can either refer to a terrorist funding entity or a corporate institution engaging in fraudulent activities. The procedure used by forensic accountants combines criminal investigation processes with financial analysis techniques. It begins with the foundational phase and later leads into interpersonal communications, data collection, and analysis (indirect and direct), and later ending with the trial (Dorrell).

In the foundational phase, all transactions are assembled and used to prepare baseline data used

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