Accounting is the process of keeping up with financial accounts, i.e. keeping money in order. “Forensic” refers to something that can be used in a court of law. Therefore forensic accounting is used in investigation and court to procure evidence about finances for a case.
What Types Of Cases Is Forensic Accounting Used For?
The types of cases forensic accountants work on are typically about fraud, money laundering, and others types of a crime involving money. This leads to forensic accountants also being called by other names, such as fraud auditors, investigative accountants, fraud investigators, and forensic auditors. If you’ve ever met someone with such a title, they investigate crimes dealing with misplaced money or suspicious financial accounts.
The Forensic Accounting Process
Because of the sensitivity of the cases, they’re involved in, forensic accountants must act with the utmost discretion. Typically, the crimes they work for are white-collar crimes, involving not only the money but the reputations of the account holders and other parties involved. For that reason, they have to act alone and silently when investigating an account.
While they’re investigating, they are specifically looking for fraud or pieces of the puzzle that just don’t fit. They must first meet with a lawyer or attorney to receive details about the case and learn what evidence they’re supposed to be looking for. Afterward, they figure out a plan for their investigation and retrieve the records they’ll need to search to find the evidence they’re looking for.
While the forensic auditor deals a lot with numbers, they also conduct interviews to get stories and personal accounts involving the financial dealings they’re investigating. These interviews will later serve to help the accountant to piece together the puzzle, figuring out what fits and what doesn’t. They’ll look for clues, such as personal spending that the suspect(s) may have taken part in recklessly after embezzling money from their company. It’s the accountant’s job to figure out where the money went, beyond a reasonable doubt.
Once they’ve completed their investigation, they submit their findings to the court or attorney, and will likely be called to give expert testimony about their part in the investigation to present what they found to be true.
How To Become A Forensic Accountant
Once people who are good with numbers and show interest in television shows like CSI and Criminal Minds find out what forensic accounting is all about, they typically look into what it takes to gain entry into the field.
First, any aspiring forensic accountant should have at least a four-year degree in accounting, and a few years of experience in the field as well as being a CPA (certified public accountant) bypassing your Uniform Certified Public Accountant Exam.
If you want to be good, you need to start out looking for errors so you can get better at catching them. Look for errors in your own work and others. It’s good security and it gives you a head start, allowing you to stand out from any other rookie forensic accountants you may be up against when switching over.
After you get your CPA, you’ll need to go to graduate school simply to maintain the status and sharpen your craft. In graduate school, you’ll be able to find a master’s program in forensic accounting, teaching you exactly what you want to know about your field.
You’ll also need knowledge of crime and the law, which means you should take some courses in Business Law, Criminal Law, Sociology and Psychology as well as business and finance classes, which are more typical. These classes will shape you to be more well-rounded, not just knowing about finances and numbers, but also knowing better exactly what to look for, and exactly where to look.
How Much Do Forensic Accountants Earn?
According to the Federal Bureau of Labor Statistics, the median annual income of accountants and auditors is $61,690 with the lowest 10% making $38,940 and the highest 10% making $106,880. Though this statistic is not exclusive to forensic accountants, it is inclusive, so the salary you receive in forensic accounting will not fall outside of this income. With the FBI, forensic accountants start somewhere around $50k with a Bachelor’s Degree and $67k with a Master’s.
Forensic accounting is one of the more intriguing career fields to get into with options of working at companies such as Frenkel’s Forensics, especially for those people who are good with numbers and like the idea of investigating and figuring out what the missing pieces of a story are. It works with both finance and law and can be a six-figure job for those who really throw themselves into it and get the highest degree of education in the field, while also gaining valuable experience and becoming the best at what they do. Now you have all the information you need to get started.