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New accounts territory

FORENSIC accounting is emerging as one of the growth areas within the accounting profession.

With increased changes to Australia’s tax system forcing accountants to specialise, forensic accounting is becoming one of the specialisations of choice.

Forensic accounting holds the romantic attractions of intrigue and detective work and indeed has proved a bridge to private practice for some Government investigators.

Former National Crime Authority, fraud squad and Australian Securities and Investments Commission investigators are in demand for this field.

In WA, ‘big five’ accounting firm KPMG has boosted its Forensic Accounting practice with the recent addition of former Australian Securities and Investments Commission invest-igator Michael Shanahan.

Former National Crime Authority regional director Michael Cashman heads its WA practice.

Deloitte Touche Tohmatsu opened its Perth forensic accounting practice last month.

It too boasts an ASIC operative in its team.

Perth firm McKessar Tieleman adds forensic accounting to its suite of products and WA accountant and insolvency specialist Diana Newman is widely regarded as one of the doyens of the field.

As its name suggests, forensic accounting has often been linked to fraud detection, but its application goes deeper than that.

Deloittes’ Perth Forensic Practice head Martin Langridge said fraud was only a small part of what the company did.

He believes its main business will come from areas such as litigation support, insurance and technology.

With insurance claims, for example, forensic accountants can help a business hit by a bushfire make an appropriate claim.

If the business was, for instance, a vineyard, the cost to replace the vines and infrastructure, such as reticulation, is easy to establish. Even the cost of lost production can be worked out.

But what about the costs the vineyard did not incur, such as bottling and marketing?

CPA Australia WA president Justin Walawski said the thrill of chasing white collar crime attracted younger accountants to the field.

“For older accountants the attraction is the breadth of places forensic accounting can take you to,” he said.

However, Mr Walawski said there were few firms that could survive on forensic accounting alone. Many used it as one of the many services they could offer to clients.

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