Question

A forensic accountant conducting a fraud examination must follow GAAP when presenting the subject's financial data.

a. True

b. False

Please explain the reason why you chose your answer. Thank you.

Answer 1

Ans - FALSE

Forensic accountant differs from a Financial accountant in many aspects. Financial accountant reviews historical data of the comapny mainly public held companies and forms an opinion based on guidelines of GAAP primarily for stakeholders, whereas Forensic accountant's work is a lot wider as it does not only reviews historical data as is done under GAAP but it goes beyond to investigate especially if there is a fraud examination. It involves critical observation of company's events, asking questions from all employee levels as are deemed necessary and critical analysis if any 'red flags' are raised during the investigation. The work of Forensic accountant is not regular or routine like that of a financial accountant and therefore when there is Forensic accounting, it's duties and responsibilities are way beyond those that are to be followed under GAAP especially when it comes to Fraud examination.