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Types of Forensic Accounting

Forensic accounting is investigative accounting where fraud done to the company is searched for by performing a detailed research and analysis of the financial information. Manoj Pahwa and Associates are well-versed with different types of forensic account and through this article, you will know about them all.

Why different types of forensic accounting?

Fraudulent activities aren’t of a single kind, but they often produce a single result: short-term or long-term benefit to an employee/director at the expense of company’s financial health. Furthermore, wide ranges of forensic accounting techniques are needed to deal with particular large business entities. Thus, there are several types of forensic accounting.

How are the different types of forensic accounting conducted?

There are two elements to accounting: technological and human.

1.      The human element has to research and look for subtle and easy to miss nuances of a financial statement to see if there is a case of fraud.

2.      The technological element gives the accountant a deeper understanding of those easy to miss nuances.

Modern software tools combined with the investigative approach of the accounted is how different types of forensic accounting are conducted.

The different types of accounting

Each type of forensic accounting is differentiated by type of fraudulent activity committed and the aspect of financial infrastructure to look for:

1.      Financial theft: In accounting terms, it’s called embezzlement of funds.

2.      Securities fraud: It’s an investment fraud where the victim is guided into investing in dubious investment options based on false information.

3.     Economic Damages: The economic damages that the company has suffered from.

4.     M& A related lawsuits: Merger and acquisitions lawsuits are quite complex and common.

5.     Defaulting on debt: If the company is defaulting on debt, the forensic accountant investigates the debt amount

6.     Bankruptcy: bankruptcy investigation is done to see if the entity is really bankrupt or just making things up.

7.     Tax evasion and fraud: It comes under Forensic auditing, where fraud from the company’s part is investigated upon by the forensic auditor.

8.     Corporate valuation disputes: Forensic accountants, in this case, ensure that the company or company’s assets are not over/under valued.

9.     Professional negligence claims: Here, the forensic accountants investigate the claims of professional negligence.

10.Money Laundering: Money laundering is a fraudulent act where maliciously-earned money is hidden under a false and legitimate business.

11.Privacy Information: Forensic accountants check whether the privacy information is compromised.

12.Divorce proceedings:  Forensic accountants the financial value of the spouses involved to ensure proper wealth distribution.

Conclusion

At Manoj Pahwa and Associates, our accountants cover all types of forensic accounting services. We know what stone to turn, what entry to look deeper into and what transactions are dubious. Contact us if you have any such requirement.

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Importance of Accounting in Daily Life by CA Manoj Pahwa

Accounting as a career is attractive and repulsive; attractive because of the money that it can bring and repulsive because of everything else. “However, a strong business world won’t exist without accounting”- says CA Manoj Pahwa, a Chartered Accountants based in India Delhi.  Those words couldn’t be more right. Accounting is the cornerstone of the business world. That being said, its importance extends far beyond the busy rooms of offices. In this article, we are going to look at the importance of accounting in daily life.

Managing reconciliations

As an earner, you have a pretty good idea where your money is being spent and where is it coming from. That being said, in this world where you can’t be sure about anything without verifications, you always check your statements to see if the charges are correct. In the world of accounting, such verification is called reconciliation.

However, unless you are extremely paranoid, dropping everything you are doing and checking your accounts over and over again might not be a good idea. Fortunately for you, there are people who indulge with checking accounts on daily basis for a living.

Budgeting and expenditure management

Have you ever spent more money than you possess? No need to answer that question. We all have done that and our heart begins to cry seeing our bank balance after that. While overspending can be forgiven once or twice, going overboard will give you a negative bank balance. In such cases, you will have to face additional banking charges, thus budgeting concept exists.

Budgeting is a way to hold a leash on your expenditure horse. It can take several forms from investment management to other nuanced forms. All of them are geared towards maintaining your financial well being so that the next time you buy that new Iphone, you can actually pay for it.

Watching over your finances

One of many facts that are accentuated by Manoj Pahwa CA is the value of auditing, which is essentially performing an inspection of your finances. In a world where greed is considered good, auditing has become a prominent tool to mitigate the effect of corruption in companies. Through auditing, you can keep your assets sage, improve the efficiency of your operations, increase financial reliability and integrity, ensure compliance with laws and statutory regulations and establish procedures to monitor the financial transactions.

Auditing is not only the key to cultivating a healthy business, but a healthy household. Auditing your finances allows you to keep a close watch on your expenditures which further allows you to ensure good financial stability in the present to preserve a better future.

Pulling money together for a big project

There are some affairs that require you to collect some money together within a short time. Accounting firms provide the services of Project Financing. Through project finances, you can avail funds for such affairs quickly.

Now, generally project financing is associated with the act of funding long term infrastructure and industrial projects. However, suppose you have to increase the size of your house and you want to add a couple of extra floors into the mix. In your non-business, life, having such an endeavour is can be considered a project, so why not finance it with the power of accounting?

Choosing the best path to move forward

Many of the misconception that “numbers�� and few calculations are all that accounting entails. They can’t be more wrong. The Chartered accountants working with Manoj Pahwa have put a good point forward in this case. They emphasize on the analysis part of accounting. Just like you weigh in investment option to choose the best one for you in accounting, you weigh in the best paths to walk on towards your future.

Without the analytical approach that accounting bestows upon you, weight the options put in front of you can be difficult. Accounting allows you to quantify your choices in a comprehensible manner.

Conclusion

One can say that accounting presents a quantitative estimation of the finances that are then interpreted towards their quality. It’s an important facet of life that shouldn’t be ignored. And if you are looking for the best accounting services, you cannot ignore Manoj Pahwa and Associates.