The accounting principles are rules decided by the regulatory body on accounting practices within a region, for eg. Chartered Institute of Management Accountants in the United Kingdom.

Types of Accountants
Financial Accountants
Tax Accountants
Public Accountants
Management Accountants
Levels of Accounting Professionals
Junior Accountant
Senior Accountant
Staff Accountant
Chief Accountant
Accountant General
Accounting Clerk
Duties and Responsibilities of an Accountant

Even though there are quite a lot of niche jobs in the profession, such as the CPA job description, or financial analyst job description, or even chief accountant job description, there are a couple of duties and responsibilities that are relative to every accountant resume.

Firstly, the accountant job description entails compiling and analyzing financial information, which helps prepare financial statements, including monthly and annual accounts. Secondly, maintaining the actual financial records in compliance with the accounting standards and principles laid out. Also, all the work has to be completed within financial deadlines. One of the most important aspects of the job is to ensure accurate and timely monthly, quarterly and year-end closing.

The key to the job is obviously resolving discrepancies and irregularities in the finances of an individual or firm, as they appear. That requires effectively establishing and monitoring the implementation of accounting control procedures. Other than this, the accountant monitors and resolves any taxation issues that might arise, as well as continuously managing budgetary and forecast activities.

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In terms of the financial statements, he needs to ensure accurate recording of all revenues and expenses, so as to aid the preparation of the Trial Balance, Profit & Loss Account, Balance Sheet etc. The accountant also needs to perform a management-oriented role by analyzing financial information to recommend or develop efficient use of resources and procedures, as well as provide strategic recommendations and maintain solutions to business and financial problems.

Skill Set Requirements for an Accountant

Accounting is a number-centric profession, which has a lot of implications. Firstly, the accountant needs to pay great attention to detail and accuracy, because the wrong calculation of a single-digit can upset the final tally of an entire document. Secondly, such an individual needs to be very well-planned and organized, so that all the information required can always be at hand.

Because accountants often serve as buffers between management, public, government agencies such as the tax authority, they need to have very strong communication skills, written and verbal. The clarity with which they transfer information regarding an individual account or organization matters a lot.

Sometimes the job isn’t so easy, and hence problem-solving skills are put to the test. Maybe a number went wrong, or maybe an entire document is missing, such situations require a lot of patience and diligence. Also, stress tolerance can get one far into the profession, as well as time-management skills.

Different Lines of the Profession

Because accountants perform a variety of roles, quite a few job niches have formed over the past 2 decades or so, as accounting procedures have become more streamlined. Some of them are as follows:

Public Accountants

A public accountant is the most mainstream type of accounting work. It involves traditional accounting such as auditing, tax, and consulting activities for clients, which may be a corporation, government, nonprofit organization, and even individuals.

Specialties in public accounting are often chosen e.g. one might choose to concentrate on tax matters, such as advising companies about the tax advantages and disadvantages of certain business decisions and preparing individual income tax returns, whilst another might choose areas such as compensation or employee health care benefits etc.

Management Accountants

Another accounting job description is that of a management accountant, the field is also known as cost, managerial, industrial, corporate, or private accounting. Management accountants record and analyze the financial information of the companies for which they work.

The management accountant job description includes responsibilities such as budgeting, performance evaluation, cost management, and asset management. Management accountants are often a part of executive teams involved in strategic planning of the enterprise.

Government Accountants

A government accountant works in the public sector, maintaining and examining the records of government agencies and auditing private businesses and individuals whose activities pertain to government regulation and/or taxation.

An accountant is as important to our current world system, as water to a fish. Quite a lot of frauds and scams have been resolved because of the work of honest accountants such as Daniel Scotto, the man who first opened up the world’s eyes to the Enron scam. 

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Many of Danbro’s contractor – or freelance – clients work through recruitment agencies and the Blackpool-based company already has close links with a number of these companies.

On 2 September, Danbro took an innovative step to help it explore ways of working more closely with recruitment agencies, to further improve services to their mutual clients, by inviting agency representatives to the Donnington Park race track in Derbyshire.

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The Donnington Park MSVR Blast in the Park Championships featured a packed programme of motor racing entertainment, including two rounds of the British T Car Championship for 14 to 17-year-olds.

Danbro was supporting 16-year-old Joe Hopkins, who stands equal second in the championship points table after the Donnington Park event.

Damian Broughton, from Danbro, said: “We were delighted to welcome around 35 representatives from 11 different recruitment agencies – both new and existing contacts – to Donnington Park.

“We had a very successful day, which has proved extremely useful in building bridges with recruitment agencies towards our shared aim of giving our contractor clients the best possible service. We are delighted to have achieved such a positive and productive result.”

For more information, please contact Danbro on 01253 600140 or visit our website Danbro – Accountants for Contractors

The firm, which specialises in working with contractors and freelancers had been shortlisted in the Small Firm of the Year and Best Use of Internet: Practice categories in  the 2008 Accountancy Age Awards, which were announced on the evening of 12 November at a ceremony at Battersea Park Arena, London.

The awards recognise the very best accountants in business, practice and in the public and voluntary sectors across the UK.

Managing partner Damian Broughton said: “While we are disappointed not to have won, being shortlisted for two Accountancy Age awards is a real achievement in itself and demonstrates the dedication shown by the whole Danbro team. Now we are hoping to go a step further in 2009 and become an award winner.”

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Danbro’s shortlisting for the awards was another significant event in an excellent year for the company. During 2008, Danbro has opened a London office, been ranked one of the fastest growing private companies in the UK in the Sunday Times Fast Track 100 league table and rated in the top six in the best accountancy firm and best umbrella service categories by voters in a poll on the Contractor UK website.

Its high quality support was also recognised in an independent compliance audit by Professional Passport, which described Danbro as providing “compliant solutions combined with excellent customer service” and it received HM Revenue & Customs’ seal of approval after a successful December 2007 compliance visit.

For more information contact Danbro at their head office on 01253 600140 or their London office on 0207 836 8400.

Find out more at News, DANBRO – Umbrella Company

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To

potential benefits of an organization of their responsibilities and the entire system would be necessary to achieve a fine structure of the accounting system they have a solid foundation for a dynamic and positive in the competitive market environment and tight it is fit in. If you think your company will dominate and the other close contest seeking to dwarf your company, even if you have stacked all these competitive advantages in performance and value, it is certainly the operational services and accounting, lack of sufficiently impress investors and stakeholders, to make it convenient for you.

be affected if you think your company has all this potential for the success of the craft and still not able to not be able to give you the platform to grow and not convincing position to enforce your value will be with dealers, suppliers, investors, tax authorities and executives of your company must have a service accountants , thrive work is with the recovery in the objective aspect of your business decision-makers to make important decisions can allocate resources and collect the revenues out of it and evaluate the parties and the viability of the company and of course, the umbrella organization for the functioning and credibility of the company to decide.

Therefore, what in the accounts section on a daily basis the situation? Well, one thing they deserve, which is extremely important to everyone working there wage bill. Wages and taxes paid each employee and each billing period must be recorded. It is also required to record other deductions, including individual, such as for retirement, vacation, sick leave or health insurance. This is an important function, and lead, some companies prefer to outsource their payroll. The accounting team makes payments by check or BACS and records, they paid, how and for what. Accounting departments also keep an eye on orders, including goods that are traded on customers or clients. Another important task is to keep track of values ​​indispensable as a holding company and investment.

The accounting section receives and records all payments or currency of the company’s customers or services received. The accounting department must ensure that the money is right and the slope in the respective accounts. Partly explains the company money, how to pay it on hand for areas such as payroll or how much is what the company owes its banks, suppliers and other obligations, allowing a more accurate picture of the provision of additional funds.

Accountability is an essential need for any concern, and indeed each person as they can manage their resources INTHE review. A corporation may in trouble embarrassing if they do not understand what they have spent, since it has no indication whether a gain or success in the red. Keep finances under control, whether for a large company or organization to a single bank account details, all important regular daily process

It should also keep in mind that some of budgeting is better than nothing. Budget offers important advantages, such as understanding the dynamics of profits and the currency structure of the organization of the company. If it helps to understand the financial dynamics of it in planning changes in the next financial quarter. He will need a good entrepreneur pressure on the areas, the emphasis on development in order to increase profits. A well-planned profit and loss is the essential foundation for the bottom line of the budget. There is always looking for a well thought out the idea forward to the coming year. If nothing else, at least give the numbers in your report profits on sales, revenue, product quality and other charges, and discover how your net income forecast for the year ahead will appear.

Forensic accounting is a rapidly growing area of accounting concerned with the detection and prevention of financial fraud and white-collar criminal activities. George A. Manning in his book “Financial Investigation and Forensic Accounting” defines Forensic Accounting as the science of gathering and presenting financial information in a form that will be accepted by a court of jurisprudence against perpetrators of economic crimes. The integration of accounting, auditing, and investigative skills yields the specialty known as Forensic Accounting which focuses very closely on detecting or preventing accounting fraud. “Forensic”, according to the Webster’s Dictionary means, “Belonging to, used in or suitable to courts of judicature or to public discussion and debate.” The word accounting is defined as “a system of recording and summarizing business and financial transactions and analyzing, verifying, and recording the results.” The term ‘forensic accounting’ refers to financial fraud investigation which includes the analysis of accounting records to prove or disprove financial fraud and serving as an expert witness in Court to prove or disprove the same. Thus, basically, the forensic accounting is the use of accounting for legal purposes.

The History of Forensic Accounting

The forensic accounting can be traced back as far as 1817 to Meyer v. Sefton, a Canadian case that allowed an ‘expert witness’ to testify in court. The term ‘forensic accounting’ was first published in an article in 1946 “Forensic Accounting- Its Place in Today’s Economy” authored by Maurice E. Peloubet, a partner in Price Waterhouse. He stated that, “during the war both the public and industrial accountant have been and now engaged in the practice of forensic accounting”. Many scholars have traced the roots of investigative accounting to his work. Interest in forensic accounting spread through the United States and England early in the twentieth century. One of the first institutions to use the services of such investigative accountants was the IRS. The story of Al Capone the famous mobster being caught on a tax evasion scheme is well-known. The FBI decided to use forensic accountants and employed nearly 500 such agents during World War II. As a profession, forensic accounting continued to grow during the latter half of the century, as GAAP and tax laws became widespread and mandatory.

The need for Forensic Accounting

Forensic Accounting is a fast emerging field in the “World of Accounting”. Although it has been around for a long time, it has become increasingly popular and much relevant today in view of global financial crisis due to the downfall of the Lehman Brothers and its ripples felt across the globe. Thus, a new avatar of Accountant has emerged known as Forensic Accountant. Although Investigative Accounting has been around for years, it has only recently begun to transform into a new branch of accounting, hence Forensic Accounting. Forensic accountants unlike traditional accountants, look beyond the numbers, put their nose and eye deep into the financial books, records and data to uncover fraud, hidden assets, siphoned funds and the like. The word forensic is defined as the application of scientific knowledge to legal problems and legal proceedings. The word accounting is defined as “a system of recording and summarizing business and financial transactions and analyzing, verifying, and recording the results.” By combining these two definitions it can be concluded that forensic accounting utilizes his regular accounting principles & practices in legal situations. Forensic Accounting is like the bridge which connects accounting system to legal system. Thus, we can say that the forensic accounting is an accounting that is used in a court of law. One of the most notable legal situations in the recent past would be the Enron scandals; where large numbers of American forensic accountants were employed. The wave of financial crisis primarily caused by corporate malfeasance and fraudulent financial activities eroded public trust and investor confidence in financial reports and audit services and need was felt to look beyond the conventional accounting function which only fulfilled the compliance requirements i.e. company’s books of accounts are kept in accordance with rules & regulations. In view of the increasing number of financial frauds committed by conspiracy with complex accounting records manipulation, it was felt that a new tribe of Accountant is needed to detect the financial fraud in companies with his accounting, auditing, and investigative skills and also assist in legal matters. This area of accounting came to be known as ‘forensic accounting’. There is a global awareness to fight the cases of financial frauds. Though many strategies have been formulated and many actions have been taking to fight against it, the problem still persists. One of the major hindrances in fighting financial crime cases is lack of quality forensic analysis of the financial statements and records due to lack of forensic accounting professionals. This author who had been an investigating officer during his tenure with Delhi Police in number of major cases of financial crimes have faced this dearth of quality forensic accounting experts who could have come handy in timely & accurate investigation of the intricate financial crimes and unearth the complex modus operandi adopted by the fraudsters who are themselves in some cases highly qualified financial professionals. The reason why there has been rampant increase in white collar financial crimes because they think that they can get away with it with impunity and the greatest deterrent to thwart the criminal act is law enforcement. However, the conviction rate in the financial fraud cases was very low due to weak law enforcement which is attributable to weak litigation support in prosecution process. Without full support of accounting expert, prosecutors often fail to prove and provide strong evidence to put fraudsters behind bar. Here, the Forensic accounting can play an important role here by providing accounting or financial information or other evidentiary inputs for legal purposes. To achieve the aim, forensic accountant besides having financial accounting expertise, should also have proven skill in law, scientific investigative technique, interpersonal and communication skills etc.

Growth of Forensic Accounting

The Western Countries are utilizing the forensic accounting expertise to address the financial fraud cases. United States and Canada are pioneers in development & implementation of Forensic Accounting. The Canadian Institute of Chartered Accountant recently recognized Investigative and Forensic Accounting as an accounting specialty. The CICA has started granting its members to use the designation initials CAIFA who complete three years post qualification experience as a CA with Diploma in Investigative and Forensic Accounting (DIFA) from the University of Toronto. The CA-designated specialist in investigative and forensic accounting (CAIFA) combines the well-recognized and respected attributes of the CA – in particular integrity, understanding of business, and financial acumen – with an in-depth knowledge and experience in investigative and forensic accounting. The CA-designated specialist in investigative and forensic accounting (CAIFA) combines the well-recognized and respected attributes of the CA – in particular integrity, understanding of business, and financial acumen – with an in-depth knowledge and experience in investigative and forensic accounting. This is accomplished through a profession-endorsed certification process that has ongoing experience and education requirements. The CAIFA tells litigation lawyers, law enforcement professionals, the courts and other legal forums that the designated holder is well positioned to practise in areas such as fraud and economic loss quantification, including:

· investigating and analyzing financial evidence;

· testifying as an expert witness ;

· becoming involved in criminal investigations and uncovering financial evidence in employee or insurance fraud cases;

· Investigating in the rapidly evolving area of computer and Internet fraud.

Forensic Accounting implementation in India

However in India, this branch of accounting has not got its due recognition even after alarming increase in the complex financial crimes and lack of adequately trained professionals to investigate and report on the complex financial crimes. The task of Forensic Accountants is handled by Chartered Accountants who apart from handling traditional practice of auditing as required under the Companies Act, 1956 or Income Tax Act are called upon by the law enforcement agencies or the companies or private individuals to assist in investigating the financial crime or scam. The CA or CWAs in India are best suited for this profession due to their financial acumen acquired during their rigorous training which can be further honed by introducing post qualification degree or diploma in Investigating and Forensic Accounting similar to one introduced by CICA. The CA or CWA who acquire post qualification in Investigative & Forensic Accounting can use the designation CA-IFA or CWA-IFA and be legally recognized as the Forensic Accounting Experts to handle the investigation of financial crimes and give expert testimony in the Court of Law. However, no efforts has so far been made by the ICAI and ICWAI, the two leading statutory accounting professional bodies to move in this direction and set up a institute which can offer the post qualification diploma in Investigative and Forensic Accounting to its members.

However, growing financial fraud cases, recent stock marker scams, failure of non financial banking companies, phenomena of vanishing companies and plantation companies and failure of the regulatory mechanism to curb it has forced the Government of India to form Serious Fraud Investigation Office (SFIO) under Ministry of Corporate Affairs which can be regarded the first step of Government of India to recognize the importance and advance the profession of forensic accountants. The SFIO is a multidisciplinary organization having experts from financial sector, capital market, accountancy, forensic audit, taxation, law, information technology, company law, customs and investigation. These experts have been taken from various organizations like banks, Securities & Exchange Board of India, Comptroller and Auditor General and concerned organizations and departments of the Government. However, the main important law enforcement agency involved directly in combating white-collar crimes is the Police, CBI, DRI etc. There is a total lack on the part of these law enforcement agencies to train their investigators in this specialized part of investigating white-collar crimes involving forensic accounting. The investigation of the major financial crimes is handled by ordinary investigating officers who after spending some time in investigation of conventional crimes are shunted to the economic offence wing and they are expected to handle the financial crime cases involving complex & intricate financial records which is required to be analyzed to unearth crime or unique MO adopted by the white collar criminal. The result is obvious, the case dies its natural death and the criminals roam free as the IO given his lack of specialized knowledge & qualification fails to properly investigate the financial crime to its logical conclusion. On the other hand if we look at the western countries particularly USA, the law enforcement agencies of which like DEA, FBI, CIA has well marshaled its pool of special agents having forensic accounting backgrounds that are the backbone of the bureau’s financial crimes and terrorism financing units and investigate with professional acumen, the complex financial crime like money laundering, internet crimes, financial institution fraud and other economic crimes. Today, there are more than 600 FBI agents with accounting backgrounds. Thus, it is highly imperative on the part of law enforcement agencies in India that they follow the suit and engage specialist forensic accountant on its roll whose engagements relating to criminal matters typically arise in the aftermath of financial fraud.

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The Indian Law which refers to Forensic Accounting:

1) The Companies Act, 1956:

a) Section 235 and 237: There are provisions in Companies Act (Section 235 and 237) which empowers the Central Government to inspect the books of accounts of a company, to direct special audit, to order investigation into the affairs of a company and to launch prosecution for violation of the Companies Act, 1956. Books of accounts and other documents of the companies are inspected by the officers of the Directorate of Inspection and Investigation and the Registrars of Companies. These inspections are designed to find out whether the companies conduct their affairs in accordance with the provisions of the Companies Act, 1956 to see whether any unfair practices prejudicial to the public interest are being resorted to by any company or a group of companies and to examine whether there is any mismanagement which may adversely affect any interest of the shareholders, creditors, employees and others. Wherever inspection reports disclose any information that may be of interest to other Departments or agencies like the Ministry of Commerce and Industry, Central Board of Direct Taxes, Enforcement Directorate, State Government or Provident Fund Authorities, such information is passed on to them. If an inspection discloses a prima facie case of fraud or cheating, action is initiated under provisions of the Companies Act, 1956 or the same is referred to the Central Bureau of Investigation.

b) Provisions of Sick Industrial Companies Act incorporated into the Companies Act, 1956: The Section 424A(5) of the Companies Act, 1956 empowers National Company Law Tribunal (NCLT) to examine as preliminary issue whether the company is a sick industrial company u\s 2(46AA). Thus even before examining the viability of the scheme of revival proposed by the company, NCLT can check the genuineness of the reference made to it. Thus, inquiry by operating agency will only be to enable NCLT to decide the viability of the scheme and to assess whether the company has the ability to revive on its own. Further, Section 424B of the Companies Act, 1956 empowers the tribunal to make such inquiry as it may deem fit for determining whether any industrial company has become a sick industrial company. Further, the Tribunal may, if it deems necessary or expedient so to do for the expeditious disposal of an inquiry, require by order any operating agency to enquire into the scheme for revival and make a report with respect to such matter as may be specified in the order. Operating agency is group of experts consisting of persons having special knowledge in banking & industry in which sick industrial company is engaged and includes public financial institution, State level institution, scheduled bank or any other any other person as may be specified by general or special order as its agency by the Board. Thus, Forensic Accountant can be part of operating agency and investigate whether the reference made by the company is genuine or the accounts are manipulated or fabricated to suit the scheme of reference made to NCLT to declare it as sick company and thereby siphon public funds.

2) SEBI Act, 1992:

The share market is highly volatile and the brokers indulge into various unfair and fraudulent trade practices like synchronized share trading, manipulate and fabricate the books of accounts and cheat the gullible investors. Regulation 11 C of the SEBI Act, 1992 empowers the SEBI to direct any person to investigate the affairs of intermediaries or brokers associated with the securities market whose transactions in securities are being dealt with in a manner detrimental to the investors or the securities market. Thus fraudulent and unfair trade practices of the brokers or market intermediaries are investigated by the investigator appointed by SEBI which require the broker or market intermediary to furnish information, books of accounts, registers, documents or records etc. which is analyzed by the investigator to find out any manipulation, fraudulent practice or otherwise of the broker. Thus, Forensic Accountant can play a lead role in assisting the SEBI to unearth the complex share related frauds perpetrated by the brokers.

3) The Insurance Act, 1938:

Section 33 of the said Act empowers the IRDA to direct any person (“Investigating Authority”) to investigate the affairs of any insurer. The investigating authority may seek assistance of the auditor (or actuary or both) who shall be the Chartered Accountant within the meaning of Chartered Accountant Act, 1949 for the purpose of assisting him in any investigation. The books of account, registers and other documents are taken by the investigating authority in its custody to analyze it to find out the manipulations or fabrication in the books of accounts. Thus, Chartered Accountants plays a front role as an Forensic Accountant and aid in the investigation conducted into the affairs of the insurer as per the provisions of Insurance Act, 1938.

4)  The Prevention of Money-Laundering Act, 2002:

Section 3 of the Prevention of Money Laundering Act, 2002 defines the offence of money laundering as involvement of a person in any process or activity connected with the proceeds of crime and projecting it as untainted property. The three important stages in the money laundering process are:

· Placement: Physical disposal of cash acquired from illegal sources by depositing the cash in domestic banks or other kinds of financial institutions.

· Layering: Working through complex layers of financial transactions to distance the illicit proceeds from their source and disguise the audit trail.

· Integration: Making the wealth derived from crime appears legitimate.

Forensic Accountant can often be involved in the following antimony laundering activities:

· Investigating and analyzing financial evidence to establish a suspicious transaction;

· Developing computerized applications to assist in the analysis and presentation of financial evidence;

· Communicating their findings in the form of reports, exhibits and collections of documents that assist the banks in submission of the suspicious transaction reports to the regulator; and

· Assisting in legal proceedings, including testifying in court as an expert witness and preparing visual aids to support trial evidence.

5)  The Companies (Auditor’s Report) Order, 2003:

CARO, 2003 requires the auditor to report to the effect that if a substantial part of fixed assets have been disposed off during the year, whether it has affected the going concern status. In order to carry out the duties, the auditor has to draw a corollary and reference to the section 293 Companies Act, 1956, AS 24 (‘Discontinuing Operations’) and to AAS 16 (Going Concern) and thereafter make his observations on this matter. It also requires the auditor to report on Frauds i.e.; if any fraud on or by the company has been noticed or reported during the year.

Expert forensic accounting evidence

Who is an expert witness?

An expert witness is a witness, who by virtue of education, training, skill, or experience, is believed to have knowledge in a particular subject beyond that of the average person, sufficient that others may officially (and legally) rely upon the witness’s specialized (scientific, technical or other) opinion about an evidence or fact issue within the scope of their expertise, referred to as the expert opinion, as an assistance to the fact-finder. Expert evidence is evidence given to a court or tribunal by a person, skilled and experienced in some professional or technical sphere, of the conclusions he has reached on the basis of his knowledge, from facts reported to him or discovered by him by tests, measurements or similar means. It is commonly given by, for example, doctors, chemists, surveyors, architects, accountants and the like. In a Scottish case, Davie v Edinburgh Magistrates (1953) , it was said that the function of an expert witness “…is to furnish the judge with the necessary scientific criteria for testing the accuracy of his conclusions, so as to enable the judge to form his own independent judgment by the application of those criteria to the facts proved in evidence” .

An expert witness is different from ordinary witness

Expert witnesses have a different status from ordinary witnesses when giving evidence at a Court or other judicial or quasi-judicial tribunals. The evidence of the “expert” differs from that of the ordinary witness who testifies as to facts observed, in that the expert is permitted to express his/her opinion on a matter that has occurred in the past, or may occur in the future which have not been actually observed by the expert, who is providing evidence. The relevance and weight which the Court or tribunal will attribute to such an opinion within the total evidence which is adduced is a matter for the Court or tribunal.

An expert, unlike other witnesses, is allowed, because of his special qualifications and/or experience, to give opinion evidence. It is for his opinion evidence that he is called, not for his view of the facts or circumstances of the dispute, although his interpretation of the facts is often necessary in order to explain and/or justify his conclusions.

Forensic Accountant as an Expert Witness:

The tradition and law relating to the status of the experts as witnesses dates back to English Courts around 1550. However, the first recorded use of an accountant as an expert witness was in Meyer V. Sefton, 2 Stark. 274 (1817). The use of Forensic Accountant testifying as an expert witness in the Court of law is becoming increasingly prevalent today in view of the rapid increase in the financial fraud cases. In court cases where the knowledge of an expert can help to better explain the facts in issue or relevant facts, an “expert witness” may be called upon to give expert testimony.

Section 45 of the Evidence Act which makes opinion of experts admissible, lays down that when the Court has to form an opinion upon a point of foreign law, or of science, or art, or as to identity of handwriting or finger impressions, the opinions upon that point of persons specially skilled in such foreign law, science or art, or in questions as to identity of handwriting, or finger impressions are relevant facts. However, neither the Indian Evidence Act nor there is any seminal judicial pronouncements which clarifies as to when, how and under what circumstances, the testimony of Forensic Accounting Expert would be admissible or inadmissible.

In order, to bring the evidence of a witness as that of an expert it has to be shown that he has made a special study of the subject or acquired a special experience therein or in other words that he is skilled and has adequate knowledge of the subject. The Cost Accountant or Chartered Accountant can be considered as an expert to give testimony within the meaning of Section 45 of the Evidence Act. Moreover, the draft of “The Companies Bill, 2008″ includes the definition u/s 2 (1) (zn) which interalia includes Cost Accountant and Chartered Accountant in the definition of “Expert” which can be also considered/extended for relying upon their testimony in the Criminal/civil cases by the court.

In USA, however, the admissibility of the Forensic Accounting Expert testimony is supported by the Judicial Pronouncements and Federal Rule of Evidence. Over the years, the US Supreme Court has delivered several decisions clarifying its standards for the admission of expert testimony:

In Frye v. U.S., the Court stated that expert testimony will be admitted if based on a methodology “generally accepted” by the scientific community.

In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) the Court concluded that the trial judge must act as a gatekeeper for expert testimony, considering several nonexclusive factors applicable

to the testimony’s reliability and relevance, including:

· Whether the theory or technique has been or can be tested,

· Whether the theory or technique has been subjected to peer review or publication,

· The known or potential rate of error, and

· Whether the theory or technique is generally accepted in the relevant scientific community.

Although Daubert focused on the admissibility of scientific expert testimony, its progeny have had a great impact on Financial Expert testimony. In Kumho Tire Co. V. Carmichael, 526 U.S. 137 (1999), the Court made clear that the gatekeeper function applies to all expert testimony, not just scientifically-based testimony.

Rule 702 of the Federal Rules of Evidence effectively codifies the Supreme Court’s decisions in “Daubert” and “Kumho”. Rule 702 provides that if the Court finds that scientific, technical or other specialized knowledge “will assist the trier of fact to understand the evidence or to determine a fact in issue,” and if the Court finds that the witness is qualified as an expert “by knowledge, skill, experience, training, or education,” then the Court may permit the witness to testify — so long as the witness’ testimony is based on “sufficient facts or data,” the testimony “is the product of reliable principles and methods,” and the witness has “applied the principles and methodology reliably to the facts of the case.

Further, concerning determinations of nonscientific expert testimony reliability, financial expert testimony (which includes Forensic Accountant Testimony) in particular, the Advisory Committee on the Federal Rules of Evidence and the Standing Committee on Rules of Practice and Procedure (“Committee”) which proposed amendments to the texts of Rules 701, 702, and 703, specifically observed:

“Some types of expert testimony will not rely on anything like a scientific method, and so will have to be evaluated by reference to other standard principles attendant to the particular area of expertise. . . . The expert’s testimony must be grounded in an accepted body of learning or experience in the expert’s field, and the expert must explain how the conclusion is so grounded. “Whether the testimony concerns economic principles, accounting standards, property valuation or other non-scientific subjects, it should be evaluated by reference to the ‘knowledge and experience’ of that particular field.”

Therefore, under the Federal Rules of Evidence, a judge will permit an accountant to testify as an expert witness only if the judge decides that:

The accountant’s testimony will help the jurors or judge understand the evidence or determine a fact in issue.

The accountant is qualified as an expert by knowledge, skill, experience, training, or education.

The accountant can show that his or her testimony (a) will be based on sufficient facts or data and (b) will be the product of reliable principles and methods that have been applied reliably to the facts of the case. (These requirements are often referred to in shorthand as “qualification, reliability, and fit.”)

Thus, under the rule announced in Daubert v. Merrill-Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and expanded in Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), the courts must ensure that experts-scientific and otherwise-will offer testimony that is methodologically sound and relevant to the facts of the case before admitting their expert testimony.

Qualifying as an Expert Witness

Challenges to financial expert testimony have skyrocketed in recent years. Since Daubert v. Merrell Dow Pharmaceuticals, Inc. (1993), an increasing number of testifying experts have been subjected to challenges by opposing counsel in an attempt to prevent the experts from testifying (Journal of Forensic Accounting: 1524-5586/Vol.IV(2003), Page-113). Figlewicz and Sprohge in their article, “The CPA’s Expert Witness Role in Litigation Services: A Maze of Legal and Accounting Standards,” offer ten guidelines to help avoid legal challenges:

1. Know the relevant professional standards.

2. Apply the relevant professional standards.

3. Know the relevant professional literature.

4. Know the relevant professional organizations.

5. Use generally accepted analytical methods.

6. Use multiple analytical methods.

7. Synthesize the conclusions of the multiple analytical methods.

8. Disclose all significant analytical assumptions and variables.

9. Subject the analysis to peer review.

10. Test the analysis-and the conclusions-for reasonableness.

Now the various investigation agencies such as Police, CBI etc. are taking the help of CA/CWA as a Forensic Accountant and using their report as evidence in the cases of criminal/civil nature. Whether the aforesaid principles/guidelines laid down by the two US Supreme Court Judgments incorporated into Federal Rules of Evidence would be followed by Indian Courts or not will become clear in the due course of time.

However, the fact is that though till today there is general acceptance of admissibility of scientific evidence and expert’s opinion in Indian Courts, there is no special law with respect to this which lays down criteria, principles or guidelines in clear terms with regard to when the expert opinion would be admissible and when it will not as is the case under the US federal law. Section 45 of the Indian Evidence Act is insufficient in this regard. However, in case of doubt, the principles laid down by US Supreme Court can be adhered to. In conclusion, one should understand that it is ultimately for the Court Of Law to decide as to who is qualified as an expert by knowledge, skill, experience, training or education, who may testify thereto in the form of an opinion or otherwise if:

1. The testimony is based upon sufficient facts or data,

2. The test is the product of reliable principles and methods, and

3. The witness has applied the principles and methods reliably to the facts of the case

However, no doubt, with the rapid increase in the cases involving misappropriation of funds, manipulation of books of accounts, banking fraud cases, Securities scams etc. involving complex financial transactions, the Forensic Accountants and admissibility of their testimony needs to be elucidated and these would be determining factors for deciding the fate of these cases. The involvement of Forensic Accountant in financial fraud cases and his testimony will not only take these cases to logical conclusion but also will go a long way ahead to put a curb on these menace of white collar offences.

Neeraj Aarora

(Advocate)

Unlike an employee, are all tax credits and deductions available in the Tax Code now available for you. The number one strategy for a self-employed people is to keep receipts for every business expense and depreciate it. Virtually anything can be inferred, so do it. Acceptable expenses include the use of cell phones, business mileage, office supplies, home office deductions that are part of the mortgage or rent and so on contain. If you filed a tax return while self-employed, you were probably aware of what you can do a lot of more specific tax strategies for self-employed.

If your expenses exceed your income for one year, you are certainly not the tax payable for that year. What most people do not yet understand is that this kind of loss carryforwards can be carried out for seven years and applied against future profits. Alternatively, the same losses are reported to recover three years earlier tax offset. The end result of this scenario, you can create a bad company for 12 months in a profit generator by applying new tax losses of other years, which effectively removes your tax bill for that /> If you have a business, you are often a second, to tailor-funds of an individual interest. You may be able to view the travel articles and blog posts as a hobby, but it’s actually a business. If you have sold or even tried to sell all your content articles for publication, your expenses may all be related travel writing deducted from your taxable income. These include excursions and so on. This deduction can significantly reduce your taxable profits of the consulting business. Make sure to get an overview of your overall business efforts, even if you do not really think about it, being a business.

Think of your children to save on taxes. One child under 18 who do | not for you to pay FICA and so on. If the payroll for 12 months under, 250, they will not pay tax and you can deduct this amount as a legitimate business expense. Of course, the child needs to really qualify to perform a legitimate business, but registration and certainly comparable to manual tasks.

are tax strategies for self-employed are plentiful. If you are self employed, you should get professional help. Excellent knowledge can save you thousands and thousands of dollars in taxes over production for their protection. Oh, you can also deduct their charges

Other accounting policies David Christensen accounting
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Accounting essays are usually brief types of accounting papers that requires the writer to discuss an accounting topic. These essays are usually a couple of pages wide and are mostly written in the writer’s point of view. Accounting essay are also of different types. Accounting term papers are usually more detailed than the accounting essays. They may be a few pages wider than the accounting essays and usually encompass work covered during an academic term. Accounting research papers are accounting papers that documents some kind of research conducted by the writer. It may be primary research or secondary research.

Accounting research papers involve use of a more complex structure in writing than the accounting term papers and accounting essays. Accounting theses are usually similar to accounting dissertations and sometimes the names of these accounting papers are used interchangeably. In some areas, accounting theses are done at undergraduate and masters levels while dissertations are completed at PhD levels. In other places the reverse is true.  There are some common requirements that are expected when writing accounting papers regardless of the type of paper. One of these requirements is conducting of thorough research and producing empirical evidence for your argument.

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Accounting is an empirical discipline and every argument must be supported with factual evidence. Another requirement for writing good accounting papers is ensuring that your papers adhere to the rules and standards of academic writing. These are such as ensuring that the papers have been written using the correct grammar, spelling, punctuation and sentencing. Writing accounting papers that are full of grammatical errors and other writing mistakes diminishes the quality of your papers. Accounting papers should also be original and plagiarism free. Good accounting essays, accounting term papers, accounting research papers, accounting thesis and accounting dissertations should present the writers original ideas.

Ideas from other sources should be acknowledged by citing and referencing them appropriately inside your papers. Using other people’s ideas and failing to acknowledge them amount to plagiarism, which is a serious offence not only under academic rules but also under judicial laws. Due to one reason or the other you may experience difficulties completing you accounting papers. Whenever you experience such difficulties order professional accounting papers writing services from our company. We offer accounting papers for different topics and for all academic levels

. Our papers are of premium quality since they are written by writers who are highly skilled and who possess years of experience in writing. Our writers also have good academic backgrounds in accounting related fields which make them capable of writing accounting papers that are relevant and rich in content. You also receive papers that correspond to your needs when you order accounting papers from our company. This is because our accounting papers are usually custom written according to the clients’ instruction which make us capable of tailoring our papers to exactly fit to the clients needs

 NATURE OF HIRE PURCHASE AGREEMENT

 Under the Hire Purchase System the Hire Purchaser gets possession of the goods at the outset and can use it, while paying for it in instalments over a specified period of time as per the agreement. However, the ownership of the goods remains with the Hire Vendor until the hire purchaser has paid all the instalments. Each instalment paid by the hire purchaser is treated as hire charges for using the asset. In case he fails to pay any of the instalments (even the last one) the hire vendor will take back his goods without compensating the buyer, i.e., the hire vendor is not going to pay back a part or whole of the amount received through instalments till the date of default from the buyer

SPECIAL FEATURES OF HIRE PURCHASE AGREEMENT

1. Possession: The hire vendor transfers only possession of the goods to the hire

purchaser immediately after the contract for hire purchase is made.

2. Installments: The goods are delivered by the hire vendor on the condition that a hire

purchaser should pay the amount in periodical instalments.

3. Down Payment: The hire purchaser generally makes a down payment i.e an amount on

signing the agreement.

4. Constituents of Hire purchase instalments: Each instalment consists partly of a

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finance charge (interest) and partly of a capital payment.

5. Ownership: The property in goods is to pass to the hire purchaser on the payment of the last instalment and exercising the option conferred upon him under the agreement.

 6. Repossession: In case of default in respect of payment of even the last instalment, the

hire vendor has the right to take the goods back without making any compensation.

 ACCOUNTING ARRANGEMENTS OF HIRE PURCHASE TRANSACTION

The method of accounting for hire purchase transactions depends on the value of sales. If the goods have substantial sales value the accounting methods adapted may be (i) Cash price method or (ii) Interest suspense method. Hire purchase accounting methods for goods of small sales value may be (i) Debtors method or (ii) Stock and debtors method Asset taken on hire purchase basis should be considered like ordinary purchase. However, it is necessary to disclose this fact by classifying it as “Asset on Hire Purchase”.Accordingly, amount due to the hire vendor should also be shown in his books as a liability—”Hire Purchase Creditors” with additional such classifications of amount of hire purchase instalment due and amount of hire purchase instalment not yet due.

 In the Books of Hire Purchaser

 Cash price method

Under this method, the full cash price of the asset is debited to the Asset Account and credited to the Hire Vendor Account. At the time of payment of instalment, Interest Account is debited and Hire Vendor Account is credited (with the interest on outstanding balance). When instalment is paid, the Hire Vendor Account is debited and Bank Account is credited. At the time of preparation of Final Accounts, interest is transferred to Profit and Loss Account and asset is shown in the Balance Sheet at cost less depreciation. The balance due to hire vendor is shown in the Balance Sheet as a liability (alternatively it can be shown as a deduction from Asset Account).

 Accounting

To have proper accounting record, one should know:

 (1) Date of purchase of the asset;

(2) Cashprice of the asset;

(3) Hire purchase price of the asset;

(4) The amount of down payment;

(5) Number and amount of each instalment;

(6) Rate of interest;

(7) Method and rate of depreciation;

(8) Date of payment of every instalment; and

(9) Date of closing the books of account.

Journal Entries

1. On entering into the agreement

Asset Account Dr. [Full cash price]

To Hire Vendor Account

2. When down payment is made

Hire Vendor Account Dr. [Down payment]

To Cash/Bank Account

3. When an instalment becomes due

Interest Account Dr. [Interest on outstanding

balance]

To Hire Vendor Account

4. When an instalment is paid

Hire Vendor Account Dr. [Amount of instalment]

To Bank Account

5. When depreciation is charged on the asset

Depreciation Account Dr. [Calculated on cash price]

To Asset Account

6. For closing interest and depreciation account

Profit and Loss Account Dr.

To Interest Account

To Depreciation Account

However, a firm may maintain Provision for Depreciation A/c instead of charging depreciation

to Hire Purchase Asset A/c. In such case the journal entry is:

Profit and Loss A/c Dr.

To Provision for Depreciation for Asset on Hire Purchase A/c

and naturally, Asset on Hire Purchase is shown at its historical cost.

Books of the Hire Vendor:

There are different methods of recording hire purchase

transactions in the books of the hire vendor. It is selected according to the type and value of

goods sold, volume of transactions, the length of the period of purchase, etc. The different

methods are discussed below:

Sales Method: A business that sells relatively large items on hire purchase may adopt this method. Under this method, hire purchase sale is treated as a credit sale. The only

exception is that the vendor agrees to accept payments in instalments and for that he charges

interest. Generally, a special Sales Day Book is maintained for recording all sales under hire

purchase agreement. The amount due from the hire purchaser at the end of the year is shown

in the Balance sheet on the assets side as Hire Purchase Debtors.

Journal Entries

1. When goods are sold and delivered under hire purchase

Hire Purchaser Account Dr. [Full cash price]

To H.P. Sales Account

2. When the down payment is received

Bank Account Dr.

To Hire Purchaser Account

3. When an instalment becomes due

Hire Purchaser Account Dr.

To Interest Account

4. When the amount of instalment is received

Bank Account Dr.

To Hire Purchaser Account

5. For closing interest Account

Interest Account Dr.

To Profit and Loss Account

6. For closing Hire Purchase Sales Account

H.P. Sales Account Dr.

To Trading Account

In this connection, the student should note the following:

(i) The entire profit on sale under hire purchase agreement is credited to the Profit and Loss  account of the year in which the sale has taken place.(ii) Interest pertaining to each accounting period is credited to the Profit and Loss Account ofthat year. Students at Institute of Accountants will learn various accounting concepts under one year computer Accounting Course. Or Diploma in Accountancy

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