The joke among forensic accountants is that most people believe the
job involves unearthing money from the newly deceased. Although this is a
far cry from actual responsibilities, this particular branch of accounting
does involve intrigue and mystery. In fact, forensic accountants are the detectives
of the financial world.
Being a forensic accountant, according to Alan M. Langley of Alan M. Langley
and Associates, is about "being able to see the forest for the trees, having
a business sense and street smarts, as well as a need to see beyond the numbers
presented to you."
Forensic Accountant: A Lawyer's Best Friend
When a corporate crime is suspected, a forensic accountant might be brought
in to uncover financial evidence of wrongdoing. Or once the crime is in court,
a forensic accountant might testify to help nail the culprit.
Steven Bankler is a forensic accountant who testified in the notorious
Whitewater scandal. "Forensic accounting is a growing field since it involves
litigation -- and law schools are turning out more and more lawyers!" he says.
An example of a growing corporate crime that might involve a forensic accountant
is procurement fraud. Imagine this: three vendors are competing to win a contract
that would result in a great deal of business. One vendor wins, and his business
suddenly blossoms, thanks to this lucrative new contract.
Years later, it is revealed that an employee gave the vendor inside information
on the competitor's bids. In exchange, the employee received under-the-table
kickbacks: perhaps a summer home or a year's salary. It's up to the forensic
accountant to uncover the facts to put the employee, and the vendor, behind
According to Paul Dopp, in an article titled Keeping Procurement Fraud
at Bay, procurement fraud is soaring. This increase is mostly due to the recent
trend in downsizing company personnel, which has eliminated management and
control layers within firms. Ultimately, more crimes of this nature mean more
work for the forensic accountant.
Hal Johnson is the national executive director of the Forensic Accountants
Society of North America (FASNA). He explains that while fraud may play a
part in some jobs, it isn't the only area that requires the services of a
"The term 'forensic accounting' refers to those cases that have the potential
for litigation, such as disputed claims with insurance companies, or even
cases of divorce where assets need to be accounted for," he says.
Forensic Accounting for the Future
According to Johnson, some trends that might influence job growth in the
- Downsizing: As companies decrease managerial employees, opportunities
for white-collar crimes increase
- An aging population: As baby boomers get older, health-care fraud is expected
- Lawsuit fervor: Litigation is on the rise, and lawyers will depend on
forensic accountants for "expert" testimony
These trends are reflected in the growing number of accounting firms that
have recently added forensic accounting to their roster of services.
"The market is huge," states Johnson. "Within a few years, it will be common
practice for all high-end accounting firms to have a forensic accounting practice
Another trend that will affect the future outlook for the career is the
ever-evolving and influential Internet. Accountants may be called upon to
investigate the ever-increasing numbers of scams online. Also, there are more
opportunities for criminals to access confidential company information from
the comforts of a home office -- and subsequently, more opportunities for
forensic accountants to reveal these white-collar criminals!
Rewards at the Top
While forensic accountants earn more than their general accounting counterparts,
the education requirements are the same. Generally, a bachelor's degree in
accounting is the first step, although a growing number of states are requiring
an additional 30 hours of course work.
More and more, esteemed firms are requiring a master's degree in accounting
or business administration. In addition, all states require a prospective
accountant to take a rigorous, two-day certified public accountant (CPA) examination,
which only one-quarter of test-takers pass.
Before pursuing the education, Langley advises that future forensic accountants
do their homework and determine whether or not they are well-suited to this
field. "I would estimate that perhaps one in 100 accountants might be able
to succeed in the particular branch of forensic accounting."
A Unique Set of Skills
Because the forensic accountant must relay critical and complicated information
in a court of law, communication skills are vital.
To develop and exercise these skills, Johnson advises prospective forensic
accountants to "take classes in sales and persuasion."
"A couple of basic law classes would be very useful," suggests Bankler.
"Chances are that there will be an 'expert' employed by the opposition, so
you must be able to defend your position, as well as pick apart your opposition's
Johnson adds that the forensic accountant must be "curious, determined,
thick-skinned, and able to handle the challenge of every case being different
from the last."
Langley is enthusiastic about his career choice. "While the fees one can
earn are quite substantial, the best part of the job is being able to uncover
and subsequently resolve complex issues. In essence, being a part of a solution
rather than part of the problem."
Forensic Accounting Demystified
This Q and A is a great first step toward understanding the world
of a forensic accountant
Forensic Accounting Assignments
Review the types of assignments forensic accountants perform