Careers In Forensic Accounting | It Takes A Sleuth
Forensic accountants blend accounting, auditing, and investigative skills to uncover financial fraud.
Do you like to dig? Really dig?
Then a career in forensic accounting may be for you.
Forensic accountants combine their accounting knowledge with investigative skills to uncover large-scale corporate fraud and a multitude of complex financial schemes.
Think kickbacks, insider trading and inflated inventories. Think Ponzi schemes.
Think Bernie Madoff, the mastermind behind the largest Ponzi scheme in U.S. history. The New York financier swindled investors out of more than $65 billion dollars.
And Enron. The energy giant, using accounting loopholes and fraudulent financial reporting, hid billions of dollars in debt while encouraging employees and shareholders to invest their life savings in stocks as the company was about to collapse.
Combine law enforcement with accounting.
Juan (Ed) Roman, assistant professor of accounting at Saint Leo University calls law enforcement forensic accounting the "meat and potatoes" of forensic accounting.
Forensic accountants, he explains, conduct investigations and rebuild financial systems to uncover fraud, trace funds, discover hidden assets and more.
"They look beyond the numbers to learn the specifics," he says. "They search all records, emails, bank statements and journals. They interview the accused and they trace assets."
And they're in greater demand than ever.
According to the FBI, about 15 percent of agents employed by the bureau qualify as special agent accountants.
Diverse backgrounds can lead to forensic accounting.
In addition to accounting, forensic accountants have a wide range of backgrounds and specializations, including:
- Business law
- Criminal law
- Information systems
Many, according to Roman, hold Certified Fraud Examiner (CFE) licensure.
"It's the brass ring for forensic accountants," he says.
According to the Association of Certified Fraud Examiners (ACFE), the world's largest anti-fraud organization, "The CFE credential denotes proven expertise in fraud prevention, detection and deterrence." The 15-year-old association boasts more than 65,000 members.
To certify or not to certify?
Why get certified? There are a multitude of reasons according to the ACFE. As a Certified Fraud Examiner you can:
- Increase your earnings. CFEs earn 25 percent more than their non-certified colleagues according to the 2013/2014 Compensation Guide for Anti-Fraud Professionals.
- Advance your career. CFE certification provides documented evidence of expertise and experience.
- Enhance your marketability and job security. Robert Half International identifies the CFE as "in-demand...one of the most marketable credentials today."
- Gain professional visibility and credibility. The CFE credential is accepted worldwide as the standard of excellence in the anti-fraud profession.
- Distinguish yourself. The CFE credential is recognized in the hiring and promotion policies of leading organizations including the FBI, the U.S. Department of Defense, and the U.S. Securities and Exchange Commission.
- Impact your company's bottom line. Research shows that in organizations with CFEs on staff, frauds were uncovered 50 percent sooner, and the median fraud loss was 44 percent lower.
Additional career paths for forensic accountants.
Not sure you're up for so much crime and punishment? There's another side to forensic accounting that may just pique your interest.
Forensic accountants help with risk management and risk reduction, as well as designing accounting and auditing systems and procedures. They conduct due diligence and in-depth analyses to advise on a wide variety of financial transactions, including mergers and acquisitions, major investments and bankruptcy proceedings. And they conduct investigations that don't always make headline news.
As a forensic accountant you might also become involved with:
- Personal Injury Claims. What are the true economic losses related to a motor vehicle accident?
- Business Interruption Claims. How does an event, such as a natural disaster or major equipment malfunction, impact a business financially?
- Employee Fraud. How deep does an employee's malfeasance go? Are other employees involved?
- High-Profile Matrimonial Disputes. Have all assets been reported? Is one partner over-stating the value of a business or property?
- Partnership Disputes. What's the fair and reasonable payout for a partner who is planning to step away from the business? How much did each partner actually invest?
Be part of a growth industry.
Forensic accounting has been called "a growth industry."
And it's no wonder.
Challenging economic times often pave the way for financial fraud – from white-collar crimes and pyramid schemes to misstatement of assets and employee theft.
Uncovering the fraud is often a complex and tedious process, one that takes skill, tenacity and an unwavering commitment to arrive at the truth.
The kind of commitment it takes to be a forensic accountant.
What about forensic accounting sounds appealing to you?
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