What are the most important differences between forensic accounting and traditional accounting?

May 23, 2018 | By admin4u | Filed in: Uncategorized.

Here are the best known differences between forensic accounting and traditional accounting:

1. A very obvious and discrete key difference between a traditional auditor VS and a forensic accountant:

The former is someone who checks math accuracy in the accounting department, while the latter is someone looking behind the financial figures, realizing what's wrong. The second differentiation is "test intuition".

Intuition refers to the instinct of the intestine, which may be needed to guide the right direction from which the examination begins. This is not the acquired script, but something that can be gained with enormous experience. Mostly, in the traditional accounting framework, no examination considerations are required and are not necessary

. Traditional auditing means checking the work of others to determine whether or not they have followed the documented official policies, procedures and practices of the company. The decision is based on evidence. This is a fact and not just a question of opinion. This type of audit is required by financial intermediaries and government depending on the circumstances

. Traditional auditing places emphasis on identifying and preventing errors. Prevention is the result of an effective internal control system. The auditor evaluates the effectiveness of the internal control system by some appropriate percentage sampling transactions. Materiality is the indication of the importance of a transaction or an event.

5th Traditional auditors use statistics to determine whether or not they are likely to identify material errors and their likelihood. This is a concern as only the pattern of transactions and events will be reviewed. They examine the internal control system. They claim that if the internal control system is considered to be highly effective, material errors are unlikely

6. Traditionally, auditors generally comply with generally accepted audit standards (GAAS), which have been proclaimed by the Civil Service Accounting Supervisory Board (PCAOB). External auditors generally examine whether an organization is following GAAP. GAAP is promulgated by the Financial Accounting Standards Board (FASB). This means that all three organizations are affected by inspectors and must remain in line with old, new and changing standards and principles issued by all three organizations. [19659002] 7. Instead, forensic auditors use physical evidence, documentary evidence, documentary evidence, and demonstration evidence to identify suspects and sinners.

8th In Forensic Accounting, any information can be used as information, whether it is a documentary, a computer video or a soundtrack. At the same time, he needs an expert in the interpretation and presentation of evidence. Evidence evidence is not actual evidence. This is just a help for understanding, just like a body model or pictures or other tools used to clarify the facts.

ninth The forensic accountant is often asked as expert witness for a lawsuit or crime, the forensic accounting officer must apply reliable principles and methods to sufficient facts or data. Expert witness is a recognized expert compared to principles and methods related to relevant facts or data

10. A forensic accountant should typically have the skills and skills in the two areas: the private investigator and the accounting, which is strictly necessary for a great forensic accountant. On the other hand, there is no such requirement in the traditional accounting space.

Source by Elaine Ee Lee

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