If you have a head for numbers and an interest in solving crimes, a career in forensic accounting might be the perfect fit. Forensic accounting combines the best of both worlds: the application of accounting principles and investigative methods used to identify fraudulent transactions.
A forensic accountant is a certified public accountant who specializes in forensics. They use their accounting knowledge to detect and investigate different forms of white-collar crimes.
Forensic accountants are often employed by legal firms, insurance companies, as well as law enforcement, and other government agencies. They help with investigations and provide expert testimony in court.
What Do Forensic Accountants Do?
Forensic accountants use their auditing, tax, and accounting skills to detect and investigate financial crimes such as embezzlement, money laundering, and insider trading. A forensic account job description also includes litigation support and providing expert testimony in court cases involving fraud or other financial crimes.
In addition to their law enforcement work, forensic accountants may also provide fraud prevention services to businesses. By identifying potential weak spots in a company's financial controls, they can help prevent future fraudulent activities.
Forensic accountants can operate in either civil or criminal capacities.
Forensic accountants in a criminal capacity work with law enforcement to investigate white-collar crimes. They can use their skills to analyze financial statements and uncover evidence of tax fraud, money laundering, or embezzlement.
A forensic accountant, by definition, should also investigate and track the suspects’ cash flow to determine if they are involved in drug trafficking, terrorism, or other illegal activities. Their expertise is highly valued by leading law enforcement and security agencies, including the Federal Bureau of Investigation.
Forensic accountants in a civil capacity often work for insurance companies or law firms and investigate potential criminal activities within companies or those committed by individuals. Their work also extends to family law and divorce proceedings, where they are tasked with uncovering any hidden assets.
They may also be called upon in cases such as traffic accidents or negligence by a health care provider to assess financial damages. Other fields where forensic accountants’ expertise might be helpful are bankruptcy proceedings and corporate buyouts, with potential breaches of contracts.
Forensic Accountant Skills
The key skills that forensic accountants should possess are the ability to think critically, solve problems, and communicate effectively. They should also be well-versed in criminal law and finances to be able to identify illegal activities. Finally, as technology advances, tech-savviness is of utmost importance to keep up with the latest software and hardware used in forensic accounting.
Critical Thinking and Problem Solving
Forensic accountants must be able to think critically in order to analyze financial data and identify evidence of fraud. They must demonstrate good problem-solving skills to be able to investigate complex financial crimes.
What's a forensic accountant without excellent communication skills? In order to explain their analysis and provide unbiased findings to law enforcement, businesses, and the courts, they must possess the ability to communicate effectively. Since some of them appear in court as witnesses, they should be able to sum up complex cases and present their findings in a straightforward manner, both in writing and orally.
Another part of the job involves interviews with suspects and witnesses to gather information. Candidates should be familiar with criminal psychology and be able to identify fraudsters. They should also be skillful enough to spot inconsistencies in people's stories and ask the right questions to get to the bottom of a case.
First and foremost, forensic accountants use their accounting skills to detect and investigate financial crimes. In order to do this effectively, they must have strong investigative skills. Those in search of forensic accountant jobs must have the ability to uncover and document evidence of financial fraud. They need to dig deep into financial records and find evidence of wrongdoing so as to investigate complex financial crimes effectively.
Attention to Detail
In this job, being detail-oriented is a must. Accountants need to accurately analyze financial data and be able to identify inconsistencies and piece together evidence of financial fraud. By paying attention to the smallest details, a forensic accountant can uncover minor inconsistencies that are part of a much broader pattern of fraudulent activity.
A forensic accountant must also be well-versed in the latest software and hardware used in forensic accounting. Familiarity with computer technology enables them to investigate financial crimes more effectively. Additionally, they can use computer software to help them organize and analyze data. Like many other professionals, forensic accountants need to keep up with the latest technological advances to ensure they have the tools at their disposal.
Educational Requirements for a Forensic Accountant
Forensic accountants must have a solid educational background. To apply for a vacancy in the field, they’ll have to obtain a bachelor's or master's degree in accounting, forensic accounting, or finance. The list of forensic accountant requirements does not end there. The right candidates should also be well-versed in financial analysis, forensic science, criminal law, and fraud detection.
If the school doesn’t offer a formal forensic accounting degree, you can center your course load around subjects related to accounting, finance, criminal law, general business courses, etc.
Some forensic accountants also choose majors in computer science or information technology. This allows them to better understand and use the latest computer software and hardware used in forensic accounting. Additionally, a major in computer science can help them develop new ways to detect and investigate financial crimes.
Certifications to Obtain
Having a license or a professional forensic accountant certification is not a must. However, they can help give the forensic accountant an edge over other candidates when applying for jobs. There are several certifications that candidates can obtain to demonstrate their expertise. Some of the most popular ones include:
- Certified Fraud Examiner (CFE)
- Certified Public Accountant (CPA)
- Certified in Financial Forensics (CFF)
- Certified in Financial Management (CFM)
To earn the CFE credential designation, the gold standard in forensic accounting, candidates must join the Association of Certified Fraud Examiners, have at least two years of professional experience, and pass the CFE exam. The exam itself consists of questions regarding fraud prevention, deterrence, and fraud schemes.
Certified forensic accountant specialists are highly sought after by employers. They often have high salaries and plenty of opportunities for advancement. If you are interested in this field, obtaining one or more of these certifications is a great way to set yourself apart from the competition.
The Salary and Career Outlook
These days, forensic accountants are in high demand thanks to the growing need for financial investigations in the business world and a spike in white-collar crime. So how much does a forensic accountant make?
The Bureau of Labor Statistics projected that employment in this field would grow by 7% between 2020 and 2030, as fast as the average for all other occupations. The Bureau also expects about 135,000 openings for accountants and auditors each year during the same time period. And with the median salary hovering around $77,250 per year, according to the BLS’ May 2021 data, it's clear that this is a lucrative career path.
What’s more, it’s worth noting that the FBI forensic accountant's salary meets the national average, with an annual pay of just over $77,600.
If combing through financial statements and transaction records to look for red flags that may indicate fraud or embezzlement is your cup of tea, then you should pursue a career in forensic accounting. With solid job prospects and a high median salary, this field has plenty of opportunities for those with the right skills and education.
Aside from the economical benefits, working as a forensic accountant can be intrinsically satisfying, as you play a role in bringing criminals to justice and help to protect businesses and individuals from financial losses.
Of course, there are challenges to becoming a forensic accountant, and working in this field - the long hours, complex cases, and having to deal with the aftermath of crimes - can be stressful. But for those who thrive on solving puzzles and aren’t afraid to take on challenging situations, a career in forensic accounting can be a great choice.