What Is Forensic Accounting?
When it comes to careers in forensics, the jobs that tend to come to mind immediately are the ones we see in TV and on the big screen – you know the ones where guys use fancy, high-tech equipment to solve crimes in 47 minutes just in time for Letterman to come on.
One of the lesser known jobs are those in forensic accounting.
But for anyone interested in using their skill with numbers and financial analysis, this jobs can certainly prove to be a fascinating one.
Forensic Accounting Definition
So the forensic accounting definition would basically be the use of accounting principles to help analyze financial documents and information, and then report on the findings in order to provide evidence and testimony in court or to resolve disputes.
If that sounds a little confusing don’t worry – we’ll break the field of forensic accounting down into some smaller parts that will better explain what it is that a forensic accountant does.
The Job Of The Forensic Accountant
The field of forensic accounting can be broken into a couple of different tasks, so we’ll take a quick look at just what these are.
The first job of anyone involved in forensic accounting will be investigation. Forensic accountants are actually also referred to as forensic auditors or investigative auditors because of this investigative aspect to their job.
Much of the crime dealt with in forensic accounting is white collar crime. The forensic accountant will be called on to follow the paper trail and use their skills to do such things as
- Identify whether an employee has been stealing money from their employer.
- Help in the recovery of stolen money or any money that is determined to be the proceeds of crime.
- Determine if someone is engaging in any sort of money laundering.
- Determine if someone has engaged in any sort of fraudulent activities such as identity theft, securities or insurance fraud.
- Determine the financial situation of a married couple seeking divorce where one party is claiming the other has assets that haven’t been declared which they’re entitled to a share of.
Basically any sort of situation where an investigation into finances is required, will use someone from a forensic accounting background.
Litigation & Dispute Settlement.
The second key role of the forensic accountant is to assist in dispute resolution and legal proceedings by providing evidence about what was discovered during the investigations and audits.
To do this they need to be able to summarize the findings and present them in court, and they also need to have a good knowledge of the legal system and the presentation of evidence so that it’s not dismissed because correct guidelines weren’t followed.
Aside from the presentation of evidence, a forensic accountant may also be called upon to provide their best estimates as to damages that may have been incurred due to the actions of someone else.
Skills Required In Forensic Accounting
Obviously there is a strong need for skills in auditing and financial analysis techniques.
But these need to be combined with an ability to see beyond the numbers and look at their context within the entire situation being investigated.
You also need to have a good ability to summarize and communicate your findings so that they’re easily understood by people without your level of knowledge and skill.
Working In The Field Of Forensic Accounting
Forensic accounting is just another specialty within the field of accounting, so to work in this field you need to go through the same study and training as any other accountant.
Once this has been completed you would then start specializing in forensic accounting by undertaking further studies as well as working with an experienced forensic accountant.
The career prospects are excellent, as are the potential earnings.
So if you feel that you’ve got the skills and desire to become an accountant, and you’ve got an inquisitive sort of mind then it’s possible that a career in forensic accounting could be the perfect match for your interests.