What is the main focus of forensic accounting?

Forensic accounting primarily revolves around investigating and analyzing financial information for legal purposes. This field combines accounting, auditing, and investigative skills to assist in legal matters, such as fraud investigations, litigation support, and assessing damages in various disputes. Forensic accountants may be called upon to provide expert testimony in court, tracing funds, or uncovering schemes that have led to financial losses.

This focus on legal implications distinguishes forensic accounting from other accounting practices. While preparing tax returns, ensuring regulatory compliance, and conducting audits are essential functions of accounting, they do not emphasize the investigative and legal analysis aspects that define forensic accounting. For instance, compliance ensures that financial practices adhere to laws and regulations but does not involve the forensic scrutiny required in legal contexts. Similarly, tax preparation and non-profit audits serve different purposes within the accounting profession.