Unfortunately, disasters do not follow a predictable course. Businesses are continually being affected by floods, earthquakes, hurricanes and fires. The recovery for a company after such disastrous events can be a tremendous challenge as they sort through complex issues including suppliers, employees, inventory, and more. Forensic accountants offer vital help in the recovery process for both companies as well as the insurers who cover them.<\/p>\n\n\n\n
Experienced\nforensic accountants can make the disaster recovery process much easier for all\nparties involved. After a claim has been filed, an insurer will need\nspecialized assistance to analyze and measure the costs of the damages. <\/p>\n\n\n\n
Insurance\npolicies vary, but they usually cover a range of categories for damage, each\nwith its own list of requirements. A forensic accountant will analyze the data\nin conjunction with the coverage that the business has. <\/p>\n\n\n\n
As an\nexample:<\/strong> If the property is damaged,\nit will require one type of analysis while business interruption will require\nsomething entirely different. With most companies having a combination of\napplicable policies available, the forensic accountant’s job is to sort through\nthe various losses and determine which falls into the correct claiming\ncategory. <\/p>\n\n\n\n Using\nwidely accepted methods for analyzing business and calculating their projected\nlosses, forensic accountants use historical data as a solid starting point. The\nolder the company, the better the records are for planning a reasonable\nestimate. Unfortunately, even with a long and well-documented history, a\nprojection cannot be made merely on old data alone. The forensic accountant\nmust also take into consideration the trends, industry, and market conditions.<\/p>\n\n\n\n The\nforensic accountant must create a model of the business as well as prepare a\nbusiness interruption calculation to estimate the proper amount of lost\nearnings. <\/p>\n\n\n\nThe Challenges<\/h3>\n\n\n\n
This calculation is created with a combination of different components, including:<\/h4>\n\n\n\n