Track the money, expose financial fraud, and master the foundational investigative techniques used by top forensic accountants and corporate auditors.
This lesson introduces forensic accounting and auditing as a specialized area of practice that combines accounting knowledge, investigative techniques, analytical judgment, and legal awareness. Unlike routine accounting or recurring audit work, forensic accounting is typically performed in response to a specific allegation, dispute, loss, claim, or financial question. The lesson explains how forensic accountants move beyond the recording of transactions to examine the business reality behind the numbers, identify unusual patterns, evaluate evidence, trace funds, quantify losses, and communicate findings in a manner suitable for attorneys, clients, regulators, courts, judges, juries, and other decision makers.
The lesson also distinguishes forensic accounting from traditional accounting and auditing by emphasizing purpose, audience, evidentiary support, and communication. Students examine the differences between litigation support and investigative accounting, including how forensic professionals assist counsel, prepare damages analyses, review documents, participate in discovery-related activities, prepare reports and exhibits, and potentially testify as expert witnesses when qualified by the court. The discussion further explores common forensic engagements such as fraud investigations, shareholder and partner disputes, insurance claims, matrimonial asset tracing, personal injury and business loss matters, professional negligence claims, forensic audits, and alternative dispute resolution.
Throughout the lesson, students are encouraged to view forensic accounting as a disciplined but flexible process. The forensic accountant begins by understanding the client’s concern, performing conflict checks, conducting preliminary investigation, developing an action plan, obtaining relevant evidence, analyzing the information, and reporting findings. The lesson stresses that professional skepticism, objectivity, independence, discretion, persistence, organization, and sound judgment are essential because forensic conclusions may be challenged in litigation or other dispute-resolution settings. The accompanying employee vendor fraud example illustrates how financial records, vendor relationships, approval patterns, missing documentation, and careful wording of findings come together in a practical forensic investigation.
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Lynn Fountain has over 45 years of experience spanning public accounting, corporate accounting and consulting. 24 years of her experience has been working in the areas of internal and external auditing. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance. Ms. Fountain has held two Chief Audit Executive positions for international companies. In 2011, as the Chief Audit Executive for an international construction/ engineering firm, she was involved in the active investigation of a joint venture fraud. The investigation included work with the FBI and ultimately led to indictment of the perpetrators and recovery of $13M. Ms. Fountain is currently engaged in her own training and consulting business and is a regular trainer for the AICPA. Ms. Fountain is the author of three separate technical books. “Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations” was published by the Institute of Internal Auditors Research Foundation. -“Leading The Internal Audit Function” and -“Ethics and The Internal Auditor Political Dilemma” were published by Taylor & Francis In addition Ms. Fountain was a contributing author to the certification program exam for the National Association of Accountants. She also has certificate programs on various on-line platforms. Ms. Fountain has performed as an adjunct instructor for the School of Business for Grantham University and developed the first internal audit curriculum for the School of Business at the University of Kansas. Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CGMA, CRMA credentials and CPA certificate (non-active).
