The Need to Invest in a Forensic CPA
by Larry Goldsmith, JD, CPA, MAFF, and Julieann Chaet, CPA
So, there I am stuck in traffic attempting to get home from my day at the office, and I cannot find anything on the radio that I want to listen to. One commercial after another, or one not necessarily bad song, just not what I care to listen to, and this commercial comes on about investing in gold. You’ve probably heard the commercial a 1000 times, and either acted on it, thereby making an investment in gold, or thought, when is this commercial going to end? That’s when this blog was born. The same gold commercial that I’ve listened to 1000 times, for whatever reason in that particular moment on that particular day, was a brainstorm. That is to say the investment in gold can be comparable to the investment in a forensic accountant.
Give me a moment while I explain. Darrell D. Dorrell and Gregory A. Gadawski are the authors of many forensic accounting textbooks. Their definition of forensic accounting is “the art and science of investigating people and money”. This is precisely what we at CJBS do in the forensic department. Our team investigates any documents that relate to someone’s behavior and habits. For example, whether a corporate case or a personal divorce case, two of the first items we ask for are the known bank account statements and the credit card statements. Bank statements and credit card statements show the habits of the company or the habits of an individual. For example, were the appliances purchased for the work place or were they for the home? Why does the company credit card show a down payment on an auto when the company that s/he is employed for pays the lease of the auto that the employee is driving? Why is the business doing so poorly that they are increasing the line of credit if sales are on the rise?
Forensic accounting is about finding the gold. Of course gold can be the gold bar that you think of when you hear the commercial for investing in gold, but gold can come in not-so literal packages. How about a real estate property that one spouse never knew existed? Or receiving monthly child support payments without going back to court each month to fight for what was already determined to be your lawful right? How about the company that is continually just breaking even only to discover that company’s monies was used to pay for an employee’s personal expenditures?
Sometimes there is one working spouse that controls all the money of the household. The other spouse is at home to raise the children, while trusting his/her partner to invest the monies for their collective benefit and ownership. Years later the marriage may be at a breaking point, and the spouse that stayed home may not be aware of what assets were purchased or where the monies have gone during the marriage. Many times the stay at home spouse lacks the knowledge of which bank accounts exist.
It is the forensic CPA that can discover unknown assets such as real estate properties or bank accounts. Attorneys went to law school to study the law. CPAs like numbers and they have the education to understand the flow of these numbers. Forensic CPAs differ from ordinary CPAs in that Forensic CPAs utilize specialized techniques to find the hidden assets and income.
As forensic CPAs at CJBS, our team is trained to find the gold.
CJBS, LLC is a Chicago based firm that assists its clients with a wide range of accounting and financial issues, protecting and expanding the value of mid-size companies. E-mail Larry at *protected email* or Julieann at *protected email* if you have any questions about this posting or if we may be of assistance in any way.
Julieann Chaet, CPA
Call Julieann at 847.580.5449, or e-mail: moc.s1571014702bjc@c1571014702j1571014702
Larry Goldsmith, JD, CPA, MAFF
Call Larry at 847.580.5427, or e-mail: moc.s1571014702bjc@y1571014702rraL1571014702