Financial Analysis of Material Transactions
Forensic accountants are professionals who specialize and are skilled in tracing cashflows and examining voluminous financial data to discern patterns of fraud and asset concealment.
A&C utilizes financial analysis techniques to examine unexpected relationships in financial information. If the investigation reveals unexpected deviations in relationships, they may most likely indicate errors, but also might indicate illegal acts or fraud. As such, these deviations in expected relationships warrants a further investigation to determine the cause of such deviation.
Several methods of analysis are used to examine areas that most likely represent fraudulent accounting methods. Analytical procedures such as percent analysis – vertical and horizontal analysis, ratio analysis and cash flow analysis are used to detect and examine relationships of financial information that do not appear reasonable. They are used to identify both – differences in data that are expected and also differences in data that are not expected. Further analysis of such patterns in data leads to identification of errors, possible fraud, and other unusual or non-recurring transactions or events