Business today is not the same as it was before. New ideas come and go, and business concepts are constantly evolving toward a better economic cause. As a result of business developments, a number of specialized fields in accounting have evolved. One of the more recent trends is forensic accounting.
You have encountered the two terms before, separately at least; and never have you imagined that they can be put beside each other.
I get this weird image of private investigators in a crime scene all holding calculators instead of magnifiers and cameras. And it's even weird when you imagine a bookkeeper trying to prepare quarterly financial statements with knives and elastic gloves! But the term is really not that strange.
The term "forensic" means "relating to courts of justice or public disputes" or "suitable for use in a court of law". Forensic accounting involves the use of accounting expertise in court and litigation cases, fraud investigation, claims and dispute resolution, and other areas that involve legal matters.
Unlike the popularly dramatic forensic setting that focuses on extraction of DNA and bullet trajectory calculation, forensic accounting deals with financial and corporate crimes such as fraud.
Due to the recent cases of fraud and finance related crimes, the need for fraud deterrence and detection has been intensified. This is the reason forensic accounting continues to enjoy a rapidly increasing popularity in the world of business and finance.
Forensic accountants perform two main types of services: investigation and litigation support.
Investigation involves the examination of potential and actual evidences that could suggest the existence of fraudulent activities and the pertinent information associated in them.
In litigation support, forensic accountants provide assistance in a given case, primarily related to the calculation or estimation of economic damages and related issues. Forensic accountants also present evidences and act as expert witnesses in court rooms where they provide valuable points that are useful in deciding over fraud and related cases.
Due to the perceived expertise and the value placed by the society to forensic accountants, business entities seek for consultation and advisory services.
Forensic accountants are skilled in the ins and outs of fraud schemes. They can be hired to do investigative works and provide recommendations to mitigate the likelihood of fraud activities from occurring. Forensic accountants also work with incidents of negligence, bankruptcy, contracts, and other cases that involve recovery of damages.
Because of the increasing popularity of this field, many schools now offer degrees and training programs related to forensic accounting.
The first thing that you should consider if you want to become a forensic accountant is to obtain a bachelor's degree in accounting. Forensic accounting courses are usually offered in the master's degree level.
Accounting certifications in the forensic accounting field will help you establish value and recognition in the society. Holding a certification proves that you are qualified to perform services in such field. Several accounting certifications are available to forensic accountants.
Forensic accounting is hailed as one of the fastest growing careers today; probably the fastest in the accountancy profession.
Forensic accountants are hired by private employers and the public who wish to avail of their valued services. Government agencies hire FAs to assist them in solving financial irregularities within their system. The research and academe sector also demands for their knowledge in such specialized field.
Having a background in forensic accounting exposes accountants to wider lenses in the accounting horizon. It provides a value-added qualification that is useful especially to those who are in the management level positions and advisory departments.
The average salary of forensic accountants in the US is around $85,000 with many earning more than $100,000 annually. Six-digit annual salary is not uncommon in this type of specialization. The starting salary of forensic accountants averages $60,000 per year.
Certified in Financial Forensics (CFF). This certification is granted by the American Institute of Certified Public Accountants (AICPA) to Certified Public Accountants (CPAs) who have developed expertise in the forensic accounting field. This is an additional accreditation you may wish to consider in addition to having a CPA license.
Certified Forensic Accountant (Cr.FA). The American College of Forensic Examiners International (ACFEI) grants the Cr.FA credential also to CPAs who meet their certification requirements.
Certified Fraud Examiner (CFE). The CFE is a globally recognized professional designation for individuals who specialize in fraud prevention, detection and deterrence. It is offered by the Association of Fraud Examiners (ACFE). CFEs exhibit proficiency and professional excellence in performing services to uncover fraud and implement internal controls and systems to prevent them from occurring.
Forensic accountants are well respected because of their ability to utilize accounting expertise and detective skills. They can have a very rewarding and enjoyable career with good employment and earning opportunities.
If you are looking for an exciting way to practice accounting, then you might want to consider getting into forensic accounting.