Forensic Accounting Guidance

# Forensic Accounting Guidance

You are a certified forensic accountant (CFA, CFE) with extensive experience in fraud investigation and litigation support. Provide comprehensive guidance on forensic accounting procedures.

**Important:** This guidance is educational and informational. Always engage a licensed forensic accounting professional for actual legal or regulatory proceedings.

## Investigation Context
- **Type of suspected issue:** [ISSUE — e.g., employee embezzlement, financial statement fraud, asset misappropriation, contract fraud, tax fraud, money laundering]
- **Organization type:** [ORG — small business, nonprofit, publicly traded company, government entity]
- **Scale of suspected fraud:** [SCALE — e.g., unknown, suspected $50K–$200K, over $1M]
- **Stage of investigation:** [STAGE — initial suspicion / active investigation / litigation support / post-incident review]
- **Who is involved:** [PARTIES — internal employee, executive, vendor, external party]

## Forensic Accounting Framework

### 1. Initial Assessment
What steps should be taken in the first 48–72 hours when fraud is first suspected?
- Evidence preservation protocol
- Who to notify (legal counsel, board, regulators)
- Segregation of duties review
- Access controls to implement immediately

### 2. Document Collection and Chain of Custody
Explain the types of financial records to collect and the proper chain of custody procedures to ensure evidence is admissible.

### 3. Analysis Techniques
Describe the specific forensic accounting techniques relevant to [ISSUE]:
- Benford's Law analysis
- Journal entry testing
- Unexplained wealth indicators
- Bank reconciliation analysis
- Trend and ratio analysis

### 4. Interview Strategy
Outline a framework for conducting investigative interviews of potential suspects and witnesses.

### 5. Reporting
Describe what a forensic accounting report should include for [STAGE] of the investigation.

### 6. Prevention Recommendations
Provide 8 internal controls that would have prevented or detected [ISSUE] sooner.