In which situation might a forensic accountant perform a financial analysis?

A forensic accountant specializes in investigating financial discrepancies and potential illegal activities such as fraud. Their skills are particularly relevant in situations where there is a suspicion of misconduct within financial records. When discrepancies are identified or allegations of fraud arise, a forensic accountant will conduct a detailed financial analysis to uncover evidence that can be crucial for legal proceedings or management decisions. This type of analysis often involves examining financial documents, tracing electronic data, and employing various investigative techniques to identify the scope and impact of any fraudulent activity.

In contrast, the other situations listed, such as regular business operations, mergers, or annual financial reviews, typically involve standard accounting practices rather than the specialized investigative approach that a forensic accountant utilizes. Regular business operations and annual reviews focus on maintaining accurate financial records and ensuring compliance with accounting standards, while mergers may involve financial due diligence but not necessarily the criminal investigation that signifies the need for forensic accounting.