A forensic accountant looks into dubious financial activity. You will be investigating white collar crimes like fraud, embezzlement and money laundering, among others. You will use your knowledge of accounting and your detective skills to determine if there is wrongdoing committed by individuals working in the government or the private sector. You may also be hired to trace the location of assets, properties and businesses of a spouse in contentious divorce cases.
As a forensic accountant, you will be conducting due diligence reviews of the financial records of the company or individual you are investigating. Since financial records these days are already in digital files, you will be required to have sufficient understanding of related computer software. You may even be asked to come up with computerized applications to help analyze the financial data you have gathered. You will be auditing bank statements, credit card statements and other records to find evidence of irregularities and wrongdoing. You know banking and accounting laws and policies like the palm of your hand to be able to immediately spot highly- suspect transactions.
You will mostly be working with law enforcement officials and lawyers in the course of your investigations. Once you are finished conducting your investigation, you will be compiling a forensic accounting report and attaching the necessary pieces of evidence to it. Your findings will allow you to make the appropriate recommendations on whether to file a case or not. If the case goes to court, you will be called to take the witness stand with your testimony treated as that of an expert witness.
To succeed in this profession, you will have to be highly analytical. This means more than being able to simply spot miscalculations in financial documents. It’s being able to connect the numbers to other pieces of evidence to check if all the puzzle pieces fit so that the big picture emerges. You also need to be very keen in spotting even the most minute details since this could spell the difference between being able to spot problematic entries or not. It goes without saying that as a forensic accountant, you should possess an inherent love for number crunching and math. You also need to have excellent verbal and written communication skills since you will be talking with different clients and preparing reports that even a person without any background of accounting will be able to understand.
Why Become A Forensic Accountant
There are a number of reasons for being a forensic accountant. One of these is the fact that it enables you to combine your accounting and investigative skills in order to find evidence of irregularities in financial transactions. Because of your unique knowledge and abilities, you are able to help smalltime investors who may have just been conned by unscrupulous hedge fund managers into investing their hard-earned cash only to find out that the returns promised to them did not materialize. You will play a very important role in putting behind bars those cunning individuals who orchestrate pyramiding scams. They promise all the good things to those who invest their money with them but they are actually the ones who are enriching themselves at other people’s expense. On the practical side, two good reasons to become a forensic accountant include the fact that they are given decent pay and the occupation itself is set to have good employment prospects in the next few years.
Forensic accountants can work accounting firms, finance and insurance and manufacturing companies. They are also employed with government agencies and regulators. The work is typically fulltime, although they can expect to work more than 40 hours a week especially if investigation deadlines are looming. Although they prepare their reports and conduct analysis of financial documents in their office, they may spend a lot of time in the office of the individual or business they are investigating. The job can be demanding and stressful.
Forensic Accountant Salary
The U.S. Bureau of Labor Statistics does not gather salary data specifically for forensic accountants. However, the Occupational Employment and Wages report of the U.S. Bureau of Labor Statistics revealed that accountants and auditors, where forensic accountants are a part of, earned a mean annual wage of $72,500. The highest paid were those who worked in finance and insurance and manufacturing industries.
Forensic Accountant Career Outlook
The U.S. Bureau of Labor Statistics does not also have job projections specifically for forensic accountants. However, the agency forecasted that the employment rate of accountants and auditors is set at 13 percent from 2012 to 2022 which is similar to the national average for all job types. The demand will come from stricter financial laws and regulations in response to corporate scandals that fueled the financial crisis. As regulators impose stricter laws and corporations seek to follow them to avoid being under the radar of regulators.
Forensic Accountant Degree
The entry point towards a career as a forensic accountant is a bachelor’s degree in accounting or related field. However, aspiring forensic accountants will want to pursue postgraduate studies by obtaining a master’s degree in accounting or master’s in business administration with a focus on accounting. An undergraduate accounting degree is not going to be enough for those who want to venture into forensic accounting. They will need to work towards becoming certified public accountants (CPAs). To become a CPA, they will need to complete more college hours—something which can be covered by a master’s degree although a master’s degree isn’t a strict requirement—and pass a national exam. The Uniform CPA Examination is a four-part exam which need not be taken all at once. However, accountants must pass all the other parts within a year-and-a-half of passing the first portion.
Aspiring forensic accountants should understand that accounting experience counts equally before one can go into the forensic accounting field. It typically takes a couple of years of solid accounting experience before one can specialize as a forensic accountant.