According to the Federal Bureau of Investigation’s website, forensic accounting has been around as long as the FBI has. The interest in this career has been raised in the last couple of decades, with such high-profile cases as the Enron scandal and the Bernie Madoff case. The question is: What does a forensic accountant do?
Forensic Accounting Explained
In legal cases involving fraud and financial misappropriation, specialists are required to interpret the evidence – forensics accountants. Forensic accounting – also known as “fraud examination” – is a specialty within the accounting field which focuses on analyzing financial records in regard to legal proceedings and investigations. They are often called upon as expert witnesses at trials to testify, explaining their findings after examination of often extensive and complicated financial information. Forensic accounting firms, many large firms, and even large law enforcement agencies have forensic accounting departments. Forensic accountants work directly with legal teams in order to provide research to support or dispute claims regarding financial matters.
Follow the Money: Forensic Accounting in Action
While this career may not seem as exciting to some people as other forensic careers as seen on popular television shows such as CSI, it often can be. In addition to investigating fraudulent bookkeeping, tax evasion and embezzlement, forensic accountants also find work tracking the money of terrorist cell financiers. Not all forensic accounting work is as exciting as that, however it is indisputably helpful. A more modest example of forensic accounting could be in a divorce case – if one of the divorcing parties is suspected of hiding funds, the legal team of the other party may hire a forensic accountant to examine the assets of the other party.
In order to become a forensic accountant, you must first be a certified public accountant (CPA), and then get a certificate in forensic accounting. Not all accountants are CPAs – while requirements for licensure vary from state to state, in general the requirements include a bachelor’s or graduate degree in accounting, a specified number of accounting work hours performed under a CPA, and passing a licensure exam. According to the American Institute of CPAs website, in order to maintain your license as a CPA, you must also take continuing professional education courses, typically 40 hours worth per year. Overall, from obtaining an undergraduate degree through certificates and licensure, the journey toward becoming a forensic accountant may take between four and six years. According to the Association of Certified Fraud Examiners website, forensic accountants earn an average salary of $104,000 per year.
With a strong average salary and interesting, diverse work opportunities, the vocation of forensic accountancy stands apart from other professions. Accounting enjoys a steady, above-average job growth outlook, according to the Bureau of Labor and Statistics. Within accounting, forensic accountants are in even greater demand. Suddenly, accounting doesn’t seem so much like “bean counting,” as it has been described in the past!