We are investigating internal fraud. Who performs forensic accounting?

When investigating internal fraud, forensic accounting is performed by specialized professionals who combine accounting, auditing, and investigative skills.

• Certified Fraud Examiners (CFEs ): Professionals certified by the Association of Certified Fraud Examiners (ACFE) who specialize in detecting and deterring fraud.
• Certified Public Accountants (CPAs ) with Forensic Specialties: Many CPAs hold additional credentials like the Accredited in Business Valuation (ABV) or Certified in Financial Forensics (CFF) credentials offered by the American Institute of CPAs (AICPA).
• Dedicated Forensic Accounting Firms and Practices: Specialized global or regional consulting practices—such as those found at major firms like RSM Fraud and Forensic Accounting Services or Kroll Forensic Accounting and Disputes —routinely handle complex internal corporate investigations, whistleblower allegations, and financial misstatements.
• Corporate Internal Audit and Legal Teams: In-house forensic investigators or external legal counsel often partner directly with forensic accountants to secure admissible evidence, trace funds, and prepare for potential litigation.

To help tailor this, could you share:

• The scale or industry of your organization?
• Whether you need external specialists or guidance on internal next steps?

I can help outline the right professional fit or initial steps for your investigation.

For an internal fraud investigation, you would typically engage a forensic accountant—ideally someone who also holds the Certified Fraud Examiner (CFE) credential.

A good investigation team may include:

• Forensic accountant: Traces money, analyzes transactions and accounting records, identifies irregularities, quantifies losses, and preserves financial evidence.
• Certified Fraud Examiner (CFE): Focuses on the broader fraud examination, including evidence gathering, interviews, investigative procedures, reporting, and potentially testimony.
• Attorney: Particularly important if the investigation could lead to litigation, termination, regulatory reporting, or criminal referral. Counsel can also help structure the investigation appropriately.
• Digital-forensics specialist: Useful if the suspected fraud involves emails, computers, phones, deleted files, or other electronic evidence.
• Internal audit/compliance: May assist with controls, access records, policies, and the organization's internal processes.

For a serious internal-fraud matter, I'd generally recommend retaining an independent forensic accounting firm through counsel, rather than having the employee's normal accounting team investigate itself. AICPA guidance specifically describes forensic accountants conducting internal and fraud investigations and collecting financial evidence.

If you tell me what kind of fraud you suspect (embezzlement, vendor fraud, payroll, financial-statement manipulation, expense fraud, etc.) and roughly the size of the organization, I can tell you exactly what type of investigator to hire and what credentials to look for.

When investigating internal fraud, forensic accounting is performed by specialized professionals who combine accounting, auditing, and investigative skills . These professionals often hold specialized certifications and work independently or as part of multidisciplinary teams.

• Certified Forensic Accountants (CFAs) and Certified Fraud Examiners (CFEs): Professionals specifically credentialed through organizations like the Association of Certified Fraud Examiners (ACFE) or holding a Certified in Financial Forensics (CFF) credential via the American Institute of CPAs (AICPA).
• Specialized Forensic Accounting Firms: Independent global or regional advisory firms (such as FTI Consulting Forensic Accounting or regional public accounting practices like CliftonLarsonAllen (CLA) Forensic Services ) that are brought in by a board of directors, audit committee, or legal counsel to ensure an objective, defensible investigation.
• Corporate Internal Audit and Compliance Teams: Larger corporations often maintain specialized internal forensic units or fraud risk management teams within their internal audit departments to handle initial or ongoing sensitive internal reviews.
• Law Enforcement and Regulatory Agencies: Government and federal entities (such as the FBI or the IRS Criminal Investigation ) employ forensic accountants when internal fraud crosses into criminal territory.

To help narrow down who you might need to hire or consult, could you share:

• The estimated scale or type of the fraud (e.g., embezzlement, vendor kickbacks, payroll schemes)
• Who within the organization is aware of the investigation (e.g., just management, the board of directors, or legal counsel)

For an internal fraud investigation, the people who typically perform forensic accounting are forensic accountants—accounting professionals trained to investigate financial misconduct, trace funds, analyze records, and produce findings that may be used in legal or disciplinary proceedings.

A fraud investigation team may include:

• Forensic accountants

• Analyze general ledgers, bank records, invoices, payroll, expense reports, and transactions.

• Trace missing or diverted funds.

• Identify patterns such as fictitious vendors, kickbacks, embezzlement, or financial statement manipulation.

• Prepare investigative reports and, when needed, provide expert testimony.

• Certified Fraud Examiners (CFEs)

• Professionals with specialized fraud investigation training. Many forensic accountants also hold the CFE credential.

• CPAs with forensic credentials, such as:

• American Institute of Certified Public Accountants’s Certified in Financial Forensics (CFF) credential.

• Internal audit or compliance investigators

• Often investigate control failures, policy violations, and suspicious activity inside an organization.

• Outside forensic accounting firms

• Companies often hire independent specialists when management, executives, or internal teams may have conflicts of interest, or when the matter could lead to litigation or regulatory reporting.

For a suspected internal fraud case, organizations commonly start by involving:

1. General counsel or an investigations lead (to protect confidentiality and legal strategy where applicable).
2. A forensic accountant or forensic accounting firm.
3. Internal audit, HR, compliance, IT/security, and sometimes law enforcement depending on the facts.

When selecting a forensic accountant, look for experience with the specific issue (e.g., employee theft, procurement fraud, payroll fraud, financial statement fraud), independence from the suspected parties, and relevant credentials such as CFE, CPA, CFF, or CIA.

If you are investigating a particular type of fraud (employee embezzlement, vendor fraud, executive misconduct, expense fraud, etc.), the ideal team structure can differ.

For an internal-fraud investigation, forensic accountants are the specialists you would typically engage. They combine accounting, auditing, and investigative skills to examine financial records, trace funds, identify irregular transactions, quantify losses, and preserve/document findings that may be used in litigation.

Depending on the situation, the investigation may involve:

• Forensic accountants — lead the financial analysis and reconstruction.
• Certified Fraud Examiners (CFEs) — specialize in fraud investigation techniques; many forensic accountants hold the CFE credential.
• CPAs / Certified in Financial Forensics (CFFs) — particularly useful when sophisticated accounting analysis or expert testimony is expected.
• Internal auditors — may investigate control failures and identify how the fraud occurred, although they aren't necessarily forensic specialists.
• Attorneys — should generally help direct the investigation when litigation or potential criminal referral is possible, especially to preserve privilege and ensure evidence is handled appropriately.
• Law enforcement — if the suspected fraud may constitute a crime, depending on the circumstances.

For an internal corporate fraud, I'd generally look for a forensic accountant or forensic accounting firm with experience in employee embezzlement, asset misappropriation, financial-statement fraud, and internal investigations, rather than simply hiring a conventional audit firm. The AICPA specifically distinguishes forensic fraud-investigation work from ordinary auditing.

If you tell me what kind of fraud you suspect (e.g., embezzlement, falsified invoices, payroll fraud, theft, financial-statement manipulation), I can also explain exactly what type of forensic professional to hire and what their investigation should cover.

When investigating internal fraud, organizations typically rely on specialized professionals who combine accounting, auditing, and investigative skills.

Who Performs Forensic Accounting?

• Certified Forensic Accountants (CFF / Cr.FA): Accountants who hold specialized credentials—such as Certified in Financial Forensics (CFF) through the AICPA or designations from the Association of Certified Fraud Examiners (ACFE) as a Certified Fraud Examiner (CFE)—focus specifically on tracing funds, uncovering anomalies, and building legally defensible findings.
• Specialized Forensic Practices at Public Accounting Firms: Large global networks (like the Big Four) and regional public accounting firms maintain dedicated forensic and dispute services groups brought in specifically for objective, third-party corporate investigations.
• Corporate Internal Audit and Compliance Teams: Larger enterprises often have internal auditors or specialized corporate security/fraud units trained to handle initial internal red flags before deciding whether to escalate to external counsel.
• Consulting and Risk Mitigation Firms: Specialized risk and advisory firms (such as FTI Consulting ) deploy multidisciplinary teams comprising former law enforcement, forensic auditors, and data analysts to manage complex corporate misconduct.

What Role Do They Play in an Internal Fraud Investigation?

• Data and Transaction Analysis: Sifting through massive volumes of general ledger entries, emails, and bank records to spot irregular patterns or hidden journal entries.
• Asset Tracing: Following the money trail to see where misappropriated funds, kickbacks, or embezzled cash actually went.
• Interviewing and Evidence Gathering: Conducting investigative interviews under the guidance of legal counsel and preserving a clear chain of custody for digital and paper evidence.
• Expert Testimony: Providing independent, objective findings designed to withstand scrutiny in civil litigation, criminal proceedings, or regulatory hearings.

To help tailor this, could you share:

• The nature of the suspected fraud (e.g., embezzlement, vendor kickbacks, financial statement manipulation)?
• Whether you need an independent external firm or guidance on utilizing internal resources?

When investigating internal fraud, organizations typically turn to specialized professionals who combine accounting, auditing, and investigative skills.

• Forensic Accountants: These are specialized accountants trained to look beyond the numbers to uncover illegal financial behavior, reconstruct incomplete or altered records, and trace funds. They often hold certifications such as CPA (Certified Public Accountant) with a specialization, CFE (Certified Fraud Examiner), or Cr.Fa. (Certified Forensic Accountant).
• Certified Fraud Examiners (CFEs): Administered by the Association of Certified Fraud Examiners (ACFE) , CFEs may have backgrounds in accounting, but they can also come from law enforcement, legal, or internal audit backgrounds. They specialize specifically in fraud prevention, detection, and investigation.
• External Forensic & Advisory Firms: Large public accounting networks (like the Big Four) and specialized consulting firms (such as FTI Consulting or regional firms like CliftonLarsonAllen ) are frequently brought in as independent third parties. Hiring an external firm ensures objectivity, which is crucial if findings need to stand up to regulatory, board, or legal scrutiny.
• Corporate Internal Audit & Specialised Risk Teams: Larger corporations often employ internal fraud investigators or specialized forensic auditors within their compliance or internal audit departments to conduct initial triage or continuous monitoring.
• Law Enforcement and Regulatory Agencies: If the internal fraud involves severe criminal activity, federal or state agencies (such as the FBI or IRS) may get involved, utilizing their own forensic accountants.

To help tailor this, could you share:

• The scale or estimated size of the suspected fraud?
• Who within the organization is currently aware of the investigation (e.g., just legal counsel, or executive leadership)?

For an internal fraud investigation, forensic accounting is typically performed by a forensic accountant—usually an experienced CPA or accounting professional with specialized fraud-investigation training.

You may encounter several relevant professionals:

• Forensic accountant: Examines bank records, ledgers, invoices, payroll, journal entries, vendor transactions, and other financial data to identify irregularities and quantify losses.
• CPA with CFF credential: The Certified in Financial Forensics (CFF) credential is an AICPA specialization specifically focused on forensic accounting and investigative/litigation support.
• Certified Fraud Examiner (CFE): Particularly useful when the investigation involves interviewing, fraud schemes, evidence gathering, and determining how the fraud occurred. Many forensic accountants hold both CFF and CFE credentials.
• Forensic/litigation accounting firm: For a significant suspected fraud, companies often engage an outside forensic accounting team, sometimes through counsel, to preserve independence and prepare findings that may ultimately be used in litigation.
• Digital forensics specialists: If emails, computers, phones, deleted files, or electronic records are important, they typically work alongside the forensic accountant rather than replacing them.

For an internal-fraud case

A strong team is often outside counsel + independent forensic accountant + digital-forensics/investigative specialist, depending on the circumstances. The forensic accountant can reconstruct transactions, trace money, identify control failures, calculate the financial impact, and document evidence. AICPA guidance specifically describes forensic accounting as involving investigative skills to collect, analyze, and evaluate evidence.

If you tell me what type of suspected fraud you are investigating (employee theft, vendor fraud, embezzlement, falsified financial statements, payroll fraud, etc.), I can explain exactly what type of forensic professional you should hire and what credentials to look for.

Certified Forensic Accountants (Cr.FA), Certified Fraud Examiners (CFEs), and specialized forensic teams at public accounting or risk-consulting firms perform forensic accounting to uncover internal fraud.

Professionals Who Perform Forensic Accounting

• Certified Fraud Examiners (CFEs): Professionals credentialed by the Association of Certified Fraud Examiners who specialize in detecting and investigating fraud schemes, interviewing suspects, and gathering evidence.
• Certified Forensic Accountants (Cr.FA) & CPAs: Specialized accountants certified by organizations like the American Board of Forensic Accounting or holding CPA licenses with a dedicated forensic specialty, focusing on tracing funds and reconstructing damaged financial records.
• Dedicated Forensic Practices at Major Firms: Large global and regional accounting networks (such as Baker Tilly or specialized forensic groups like J.S. Held ) maintain dedicated teams that combine auditing, legal evidence collection, and digital forensics.
• Outside Legal Counsel Retainers: Often, outside attorneys retain these forensic specialists directly to maintain attorney-client privilege over the investigation findings.

To help me guide your next steps, tell me:

• What type of fraud are you suspecting (e.g., embezzlement, payroll schemes, financial statement manipulation)?
• Have you already engaged outside legal counsel for the investigation?

For an internal fraud investigation, you typically want a forensic accountant—a financial professional specifically trained to investigate suspected fraud, trace transactions, analyze records, quantify losses, and document findings that may ultimately be used in litigation.

The strongest candidates often have:

• CPA — Certified Public Accountant
• CFE — Certified Fraud Examiner
• CFF — AICPA Certified in Financial Forensics
• Experience conducting internal fraud investigations, rather than just routine auditing
• Experience preserving and analyzing evidence and preparing reports suitable for attorneys or court

Who should you hire?

For a serious suspected employee/vendor/management fraud, I'd generally look for a forensic accounting firm or independent forensic accountant, rather than asking your ordinary outside auditor to investigate. A forensic accountant can work alongside internal counsel or outside litigation counsel, HR, internal audit, and—if appropriate—law enforcement. AICPA materials specifically describe forensic accountants as being engaged for internal investigations and fraud investigations.

One important consideration: involve your attorney early. If litigation or criminal referral is possible, counsel can help structure the investigation, preserve evidence, address privilege, and coordinate the forensic accountant's work.

If you tell me what kind of fraud you suspect (employee theft, embezzlement, falsified invoices, payroll fraud, vendor kickbacks, financial-statement manipulation, etc.) and what state you're in, I can tell you exactly what type of forensic specialist to look for and how to vet one.