Forensic Accounting: What Is Forensic Auditing?

Introduction:
‘Forensic auditing’ covers a broad spectrum of activities, with terminology not strictly defined in regulatory guidance. Generally, the term ‘forensic accounting’ is used to describe the wide range of investigative work which accountants in practice could be asked to perform. The work would normally involve an investigation into the financial affairs of an entity and is often associated with investigations into alleged fraudulent activity. Forensic accounting refers to the whole process of investigating a financial matter, including potentially acting as an expert witness if the fraud comes to trial. Although this book focuses on investigations into alleged frauds, it is important to be aware that forensic accountants could be

It is a type of fraud which causes a material misstatement in the financial statements. Fraudulent financial reporting include deliberate falsification of accounting records; balances or disclosures and omission of transactions from the financial statements. It may also include the misapplication of financial reporting standards. It is usually done with the intent of presenting the financial statements with a particular bias. For instance, hiding liabilities to improve any analysis of gearing and liquidity.
Money laundering
What is money laundering?

Generally, each year large amounts of funds are earned from illegal activities like people smuggling, arms trafficking, tax evasion drug trafficking, corrupt practices, people smuggling, and theft. In most cases, these funds are usually in the form of cash. The perpetrators who generate these funds want to bring them into the legitimate financial system without raising any form of suspicion. To achieve this, they have to convert cash into other forms which makes it more useable therefore less suspicion. In addition, it also puts a distance in between the perpetrators activities and the funds.
It is the name given to the procedure by which an illegally obtained funds are made to appearance

In these circumstances, any early discussions with the witness should, as far as possible, adhere to the following basic principles:
 Listen to the witness.
 Never stop the witness who is freely recalling significant events.
 Should need be, ask questions as far as possible in the circumstances. And be open-ended.
 Ask no more questions than are necessary in the circumstances to take immediate action.
 Create a comprehensive note of the discussion, taking care to record the timing, setting and people present as well as what was said by the witness and anybody else present.
 Come up with a note of the demeanor of the witness and anything else that might be relevant to any subsequent formal interview or the wider investigation.
 Record exclusively any comments made by the witness or events that might be relevant to the legal process up to the time of the interview.
Planning Information
Overview
The planning phase of an interview with a witness involves some consideration of three types of information:
 Information about the witness;
 Information about the alleged offence(s);