Forensic Accountants Uncover Success The Buzz


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 bars.

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 forensic accountant.

"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 future include:

  • 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 to jump
  • 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 group."

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 results."

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."

Links

Forensic Accounting Demystified
This Q and A is a great first step toward understanding the world of a forensic accountant

Forensic Accounting Information
More info on the field