Litigation or Fraud accounting can also be called forensic accounting.
Forensic accounting involves the use of accounting to carry out a thorough inspection of the finances of a business or an individual. Forensic accountants are often called upon to explain financial crimes in court. The analysis carried out and the information gathered through forensic accounting are almost always useful for legal proceedings.
Forensic accountants have also been specifically trained to scrutinize the financial statements to understand the true business condition. They compile information and financial evidence, analyze and interpret them. They create computer software that helps them manage the collected information and generate reports of it.
Some of the key methods forensic accounting applies when conducting business investigations are; the use of asset identification and recovery, tracing funds and due diligence reviews.
Because of their key role in legal issues, forensic accountants may sometimes enroll for additional training in the area of alternative dispute resolution (ADR).