Understand what the records can support.
Accounts can describe the same event in different ways. A bank entry records a payment; an invoice describes a charge; a ledger shows how it was classified. Forensic accounting brings those views together around a defined financial question.
The starting point is the issue to be understood. Relevant transactions are traced to supporting material, differences are reconciled and the significance of any missing information is explained.
Questions this analysis can address
What do the underlying records show?
Can the transactions and balances be reconciled?
Which gaps or inconsistencies affect the analysis?
Scope may include
Source document review
Identify the records behind a balance or transaction, including how and when they were created.
Transaction analysis
Examine the timing, purpose and accounting treatment of entries relevant to the question.
Reconciliation of records
Compare independent records and explain differences rather than treating totals as interchangeable.
Evidence-led reporting
Show the route from source information to a calculation and a reasoned finding.
How the analysis develops
A review may begin by mapping the available records and checking whether the relevant period is covered. Entries can then be reconciled, exceptions examined and explanations tested against the supporting material.
An unexplained difference remains a question until there is evidence for an explanation. The report should distinguish documented facts, assumptions, analytical inferences and matters that remain unresolved.
Before an engagement
Does an accounting difference establish wrongdoing?
A difference may arise from timing, classification, an incomplete record or an error. Its cause and significance require examination. A discrepancy alone does not establish intent.
How is the scope established?
The initial discussion defines the question, the records available and the intended use of the analysis. Suitability, independence, responsibilities, fees and deliverables are agreed before work begins.
What should I send first?
Begin with a short description of the background, the question and any relevant dates. Arrangements for sharing confidential source records should be agreed separately.