Forensic Accounting Careers and Degrees

What is a Forensic Accountant?

A forensic accountant is both a financial expert and professional investigator who works for businesses, law enforcement and other government agencies, law firms, and insurance companies. Forensic accountants integrate their financial expertise and investigative know-how to help detect financial crimes.

Once it has been determined that such as crime has been committed, forensic accountants act as a type of consultant helping to catch, prove, and prosecute the suspects, organizations, and/or individuals in question.

What Does a Forensic Accountant Do?

Depending upon the particular type of organization or agency that employs a forensic accountant, his or her daily job duties can vary widely. However, no matter the field of specialization, all forensic accountants must use their expertise and knowledge of accounting practices, regulations, and finance law to fulfill their professional responsibilities.

Investigate Financial Crimes

A large percentage of forensic accountants specialize in investigating financial crime, which may include money laundering, employee theft, embezzlement, and insurance or securities fraud.

In order to determine that such a crime has been committed, forensic accountants comb through enormous quantities of computer data to trace assets and examine transaction records, accounting statements, and other types of financial documents. They may also perform audits to assess income reporting and tax law compliance.

Anticipate and Prevent Fraud

While some forensic accountants investigate financial crimes that may have already been committed, others work to anticipate and prevent those crimes from occurring in the first place.

These forensic accountants supervise the activities and areas of finance that have proved too tempting to resist for individuals indicted and found guilty of financial crimes in the past. Perhaps the most typical example of such high-risk activity is the movement of large sums of capital across state and nation-state lines.

Provide Expert Testimony

In cases of financial crime, forensic accountants serve as expert courtroom witnesses. Preparing their testimonies far in advance, they research the defendant/s and analyze the evidence and allegations against them in order to assist the court in determining whether or not a financial crime has been and can be proved to have been committed.

Forensic accountants may even create computerized simulations and other visual presentations to help others understand complicated financial activities and terminology.

Consult with the Prosecution

Relying on their accounting expertise and knowledge of finance law, procedures, and regulations, forensic accountants provide important consultation for law firms and their attorneys throughout the entire process of litigation. In instances of financial crime, forensic accountants help prosecutors develop their line of questioning and strategize their case within the framework of finance.

Negotiate and Resolve Civil Disputes

Forensic accountants also advise litigation teams throughout civil suits, such as uncovering hidden assets in cases of divorce and calculating the sum of financial damages in cases of corporate mergers and acquisitions.

Most of the time, however, both sides in a civil case prefer to settle their financial disputes outside of court. By analyzing the terms of their contract and identifying if, when, and how those terms have been breached, forensic accountants help guide these negotiations towards resolution.

Locate and Recover Losses

While some crimes are not technically considered to be financial in nature, their activities may have resulted in profit and financial gain. In these instances, forensic accountants help law enforcement officials locate and confiscate any such criminal proceeds by tracking the movements of funds.

What is the Role of a Forensic Accountant in the FBI?

Relying on their expert investigation skills and finance knowledge, the role of a forensic accountant in the FBI is to help hold individuals who have committed financial crimes accountable for their actions.

Due to the rise in development of new terrorist organizations and surge in their recent attacks, forensic accountants have become more important to the FBI than ever before. Just like their FBI colleagues and agents, they are also responsible for improving FBI intelligence systems by adding their own reliable sources to the network.

Why are Forensic Accountants Important?

While financial crime has always been capable of wreaking havoc, the effects of recent advances in technology and information sharing are far more destructive and can be felt almost instantaneously.

In addition to detecting, avoiding and rectifying the consequences of such crimes, forensic accountants are also important to the health of overall global society and the survival of its financial institutions.

When conditions become dangerously unbalanced, forensic accountants are equipped with the knowledge and skill to to detect manipulations in currency valuations, exchange rates, and stock market activities. They also play an important role in preventing identity theft and protecting consumers from identity fraud.

What are the Working Conditions of a Forensic Accountant?

Be it multinational organizations, local and state police departments or a federal intelligence agencies, the working conditions of a forensic accountant may vary depending upon the specific organization for which they work.

In order to perform nearly all of their job duties, forensic accountants require powerful computers that are connected to extensive information-sharing networks and databases. Accordingly, the majority of forensic accountants spend their careers inside an office environment where they are surrounded by access to such technologies.

The work hours of a forensic accountant are typically from 9-5, Monday through Friday and/or 40 hours a week. However, as they are crucial in the criminal justice system and its processes of catching and prosecuting financial crimes, there are times when they may need to work much longer days, weekends, and even nights.

How are Forensic Accountants Different from Auditors?

While both professionals spend their careers examining financial documents for discrepancies, it is essentially the nature, severity, and types of these discrepancies that distinguishes an auditor from a forensic accountant. For example, auditors review financial statements to confirm that all assets and income reported by a company and/or an individual within that company are accurate.

Most large corporation have their own full-time auditors on staff to ensure the activities of their accounting departments and employees are compliant with Generally Accepted Accounting Principles or GAAP. However, in order to eliminate internal collusions, many auditors are employed by external review companies such as the IRS.

On the other hand, while forensic accountants also review financial activities in search of discrepancies, the investigations that they perform are devised exclusively for identifying types of serious financial crime such as fraud and embezzlement.

As opposed to working for privately-owned businesses and audit review companies, most forensic accountants are employed by law enforcement agencies. They work to catch those who have committed these fraudulent activities, determine how much money was taken, and come up with ways to prevent and/or make such crimes more difficult to commit in the future.

What Do You Learn in a Forensic Accounting Degree?

The career of a forensic accountant requires knowledge and skills from numerous different fields; such as business, business law, accounting, criminal justice, psychology, and technology. Accordingly, a forensic accounting degree program incorporates concepts from all of these areas and likely many more.

The following is a great start to understanding what you may learn; however, it should be noted that this is not a complete list and there are more courses and areas that will be covered in a forensic accounting degree than what is mentioned here.

• Accounting – First, and perhaps most obvious, students learn about accounting. Not only do they need to know how to perform accounting tasks themselves, but they must also have an expert understanding in order to one day detect well-hidden and seemingly insignificant financial activities.
• Accounting Software – Students will learn how to manage and navigate various of accounting software. Some examples of such software may include Peachtree, Oracle, QuickBooks, and SAP.
• Financial Law – In order to detect financial crimes, a forensic accountant must first know which activities are illegal and why. Students are taught the Uniform Commercial Code which outlines United States federal transaction laws.
• Data Skills – A large portion of a forensic accounting degree program is devoted to learning how to collect and analyze large quantities of data — especially considering how most of this data is encrypted and difficult to locate and procure in the first place.
• Statistics – In a forensic accounting degree, students are taught extensive levels of statistics in order to measure error rates, the likelihood that suspicious activities actually end up being harmless, and to help trace and reclaim money that has been moved illegally.
• Economics – Learning the principles and concepts of economics helps forensic accountants recognize the types of financial situations that can motivate people to commit financial crimes such as fraud. Understanding economics is also important when it comes to measuring monetary damages in civil cases.
• Virtual Currencies – With the increasing development of new technologies, criminals can now essentially obscure fraudulent activity and its sums by passing monies through a series of virtual currencies.
• Psychology – It is just as imperative for a forensic accountant to understand basic human psychology, thought, tendencies, and behavior and as it is for them to understand the principles of economics, finance law, and accounting.
• Ethics – Often in matters of corporate acquisitions, mergers, relocations, and employee stock/ownership, forensic accountants must investigate financial activities that may technically be legal, but are morally and ethically wrong.
• Languages – As different countries all across the world become more and more integrated through the global market, learning how to speak more than one language has never before been more advantageous, especially for forensic accountants.
• Criminology – Although financial crime is a very particular sect of misconduct, a forensic accountant is no less a criminal investigator than the traditional homicide detective. Their work requires extensive understanding of the criminal justice system and criminal motive, behavior, and psychology; i.e., the study of criminology.

What are the Requirements to Become a Forensic Accountant?

Educational Requirements

Future forensic accountants must first have a high school diploma, preferably with a GPA of 3.0 or higher, in which they focused on mathematics and statistics. Next, they will need to earn their bachelor’s degree from a competitive college or university in either forensic accounting, business, economics, accounting, or finance.

While a bachelor’s degree is all that is initially needed to enter the general field of accounting, aspiring forensic accountants should also earn an advanced degree in forensic accounting such as a master’s or even a doctorate.

The application requirements for acceptance typically include bachelor’s degree and professional certification transcripts, an undergraduate GPA no lower than 3.0, SAT, ACT, and GRE test scores, and a personal statement written by the applicant.
[sub=Forensic Accounting|1051]

Certification Requirements

After earning his or her bachelor’s degree, an aspiring forensic accountant must become a Certified Public Accountant or CPA through either the American Institute of Certified Public Accountants (AICPA). However, in order to take the CPA exam, applicants must first complete 30 credit hours of advanced education — sometimes more and sometimes less depending upon individual state requirements.

After earning their CPA license, aspiring forensic accountants can earn Certified in Financial Forensics (CFF) certification through the AICPA. To take the CFF exam, applicants are required to hold an active CPA license and AICPA membership, continued professional education or CPE of 75 hours or more, and have worked as a professional accountant for a minimum of five years.

There are many other types of certifications that a forensic accountant may earn as well, such as the CFE or Certified Fraud Examiner through the Association of Certified Fraud Examiners or ACFE. They may also obtain the CIA or Certified Internal Auditor, which is accredited through the Institute of Internal Auditors or the IAI.

What Skills are Needed to be a Forensic Accountant?

There are certain skills — hard, soft, innate, and learned — that one should possess in order to be a forensic accountant. Unlike many professions that primarily require one or the other, forensic accounting is one that mixes the analytical and technological with the intuitive and interpersonal.

To find out if you may have what it takes, review the following list for a great start to understanding the traits and characteristics you will need as a future forensic accountant.

• Interviewing and Observational Skills – When investigating financial crimes, forensic accountants may often be required to interview suspects in question and/or knowledgeable third-party individual/s. Regardless of the specific reason for interviewing someone, that person is likely and understandably going to feel nervous and even defensive whether they are guilty of a crime or not.
• Communication and Interpersonal Skills – In order to obtain and communicate financial information to and from individuals who are unlikely to have such a particular wealth of knowledge, forensic accountants must be effective communicators.
• Capability to Adapt Responsively – New evidence is continuously revealed when working an ongoing investigation. This means that forensic accountants must be able to responsively adapt, readapt, and re-strategize in order to accommodate all new findings.
• Analytical and Investigative Skills – For the most part, those who commit financial crime are highly intelligent experts in business and accounting. Forensic accountants must possess profound analytical and investigative skills in order to detect and trace the fraudulent activities of these individuals.
• Persistence and Mental Endurance – Criminals do not volunteer all the information and evidence that investigators require to prosecute them for their crimes. Therefore, forensic accountants are just like any other criminal investigator and must possess a high-level of persistence and mental endurance.
• Extremely Detail-Oriented – Forensic accountants must be extremely detail-oriented in order to examine the multifaceted layers and extensive amounts of data found in transaction reports, financial statements, and other accounting documents.
• Innate Inquisitiveness – Perhaps the trait that should be most innate for aspiring forensic accountants is inquisitiveness. As forensic accountants need information from parties who are unwilling to provide it, they must be inquisitive enough to ask question after the right question until they get the answers that they need.
• High Level of Ethics and Integrity – Investigating any type of crime requires a high level of ethics and professional integrity, and forensic accountants are no different. Forensic accountants must be able to act objectively no matter the perceived importance or value of the individual/s and/or organization/s they are investigating.
• Skepticism and Imagination – Financial crimes are difficult detect, not only because those who commit them are typically highly-intelligent accounting experts, but also because such activities are oftentimes concealed as charity endeavors and organizations. Such a level of deceit requires forensic accountants to be skeptical of everything and just as imaginative as the criminals are themselves.

What is an Online Forensic Accounting Degree?

An online forensic accounting degree integrates the studies of criminal justice, business, and finance law. However, unlike an on-campus degree program which teaches the same concepts but requires students to commute to a physical location, the classroom in this degree program is online. Students can learn about accounting, bankruptcy, and civil and criminal litigation directly from their personal computers right in the comfort of their own homes.

An online forensic accounting degree is perfect for those who need to continue working full-time throughout their education, who live far away from an on-site degree program, and/or have familial responsibilities such as caring for children or an elderly parent.

What are the Pros of Being a Forensic Accountant?

Forensic accountants receive a variety of advantages from their careers and professional life. Below are just a few examples of some of the most commonly-cited benefits.

• The Thrill of the Job – Forensic accountants are responsible for detecting crime and catching those who are commit them, and the related job duties are often thrilling, unpredictable, and a far cry from the typical career in finance and/or accounting.
• Employment and Job Security – As technology continues to develop, the demand for forensic accountants is higher than ever before. Those with the appropriate education and proper certification are almost guaranteed to find permanent, secure employment.
• The Forefront of Technology – Forensic accountants enjoy having access to the most advanced computer systems and software, oftentimes long before such technology is ever released to the public.
• Powerful Impact on Society – By catching those who have committed financial crimes such as fraud and/or bribing government officials, forensic accountants receive a deep satisfaction from holding criminals accountable for their actions and preventing the world’s economies from losing trillions of dollars every year.
• Fulfilling Intellectual Life – By analyzing data, researching, and piecing together clues to catch and prevent financial crimes, forensic accountants love the fact that they get to use their profound intellectual capabilities on a daily basis.
• Comfortable Salaries – The entry-level salary for forensic accountants begins around $50,000. That number continues to grow with each year of experience, oftentimes rising to well over six figures.
• Day-to-Day Variety of Roles – Forensic accountants enjoy the day-to-day variety of roles and responsibilities. They get to work as criminal investigators, provide consultation during criminal and civil litigation, interview suspects and knowledgeable third parties, and serve as expert special witnesses during court trial.

What are the Cons of Being a Forensic Accountant?

While forensic accountants certainly love their careers, just like anything in life, there are also a few disadvantages to the profession. Listed below are four of the most common.

• Dangers and Risks – There are inherent dangers and risks for anyone who spends his or her days investigating crime and bringing its perpetrators to justice. Forensic accountants are no different. In cases involving fraud and when testifying against criminal defendants in court, forensic accountants possess incriminatory information that individuals in question do not want to be released — and some people will go to extremes in order to prevent that from happening.
• A Long Journey There – Although the job security and salary may well be worth it in the end, it is a long and expensive journey there. Between formal education, experience requirements, and certification, aspiring forensic accountants are looking at approximately 11 years of study and preparation before they achieve the position and level they want.
• Irregular Work Hours – Depending upon the availability of information and urgency of a case, it is not uncommon for forensic accountants to work long, irregular hours, sometimes including overnight and through the weekends.
• The Stress of Great Responsibility – It is certainly fulfilling to know that you are protecting the economy and holding criminals accountable for their highly-destructive financial crimes, but it is also a great responsibility, and with great responsibility comes great stress.

Are Forensic Accountants in High Demand?

According to the Bureau of Labor Statistics, auditors and accountants should expect to see a 6% increase in job growth by 2033. The cause of such a particularly high and fast rate is attributed to the rise in multi-national corporations and economic globalization.

However, the BLS considers forensic accounting a type of highly-specialized accounting sub-field and does not track nor make predictions about the profession’s demand, salary, or job outlook separately.

Nevertheless, due to the recent and rapidly-developing world of cryptocurrencies and other technologies, forensic accountants may see an even higher demand for their employment in the next decade.

What Professions are Similar to Forensic Accounting?

Computer Forensics Investigation

Computer forensics investigation is a profession in which digital information is analyzed to uncover criminal evidence. While sometimes this process may include retrieving transaction statements, accounting information, and relevant documents for investigating financial crimes, computer forensics investigators also work other criminal cases such as murder and human trafficking.

In order to uncover these crimes and prosecute their perpetrators, computer forensics specialists search for evidence in emails, mobile devices, encrypted databases and networks, CDs and DVDs, and many other sources of electronic storage.

Forensic Anthropology

Forensic anthropologists study remains of the deceased in order to identify victims’ cause of death and obtain a variety of other relevant physical evidences. Integrating laboratory and field analysis expertise, the profession requires advanced scientific knowledge and ability to operate some of the world’s most sophisticated equipment and technology.

While many forensic anthropologists work for the FBI and other law enforcement agencies, a large portion also work for research organizations such as universities and museums.

Crime Lab Analysis

When physical evidence such as fabric fibers, fingerprints, blood, footprints, tire impressions, and other sources of DNA are obtained from a crime scene, they are brought to a crime lab for scientific investigation. There, forensic scientists and crime lab analysts examine the various forms of physical evidence for information and clues to help law enforcement officials identify and track down criminal suspects.

Information Security Administration

Information security analysts are computer systems experts who work to prevent unauthorized individuals and organizations from hacking into databases and stealing highly sensitive, confidential, and sometimes even government-classified information.

Information security analysts help prevent identity theft and keep customers’ credit card information private while making online purchases.

Forensic Ballistics

Forensic ballistics is the study of firearms, the discharge striations they leave on bullets, and the markings of contact on physical matter that the bullets make. Based upon these things, a forensic ballistics investigator can usually determine which type of explosive and/or firearm a suspect used to commit a crime.