What is Forensic Accounting?
What is forensic accounting? While most people understand what accounting is, very few people know about forensic accounting. This field differs from basic accounting because it also involves detective work. In fact, the field combines accounting, auditing and investigative skills to uncover questionable financial data. Those who plan on joining the accounting field may want to consider becoming a forensic accountant.
Forensic Accountant Job Duties
Compared to traditional accountants, forensic accountants are more like financial detectives. They use their investigative skills while conducting audits to determine if financial reports are accurate. Their primary job duty is to investigate white-collar crimes. One way they do this is by performing forensic research to trace funds and missing assets. A second job duty of a forensic accountant is to prepare analytical data for litigation. Communication skills are essential because forensic accountants must testify in court as needed.
Important Qualities of a Forensic Accountant
According to the American Institute of CPAs, forensic accountants possess a different skill set than traditional accountants. To work in the field, applicants must possess excellent analytical and communication skills. In addition, they must also know how to simplify complex information so that they can effectively present their findings in a legal setting. Not all accountants can become successful forensic accountants. Those who wish to join the field of forensic accounting must first develop investigative skills. Forensic accountants use their analytical, communication and investigative skills to stop white-collar crimes.
Where Do Forensic Accountants Work?
What is forensic accounting, and where do the accountants work? Forensic accountants solve white-collar crimes; therefore, they commonly work for law enforcement. Other potential employers include state and local governments. According to the Federal Bureau of Investigation, forensic accountants have been part of their agency since 1908. Besides the FBI, forensic accountants can also seek work with the CIA, Department of Defense and the Internal Revenue Service. Both small and major corporations hire forensic accountants. Some other possible places of employment include banks, brokerage firms, insurance agencies, non-profit companies and private practices.
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Forensic Accounting Cases
The type of cases that require services from a forensic accountant vary. A company may choose to hire a forensic accountant to conduct independent investigations. For example, a small business owner may hire a forensic accountant if he or she suspects that a bookkeeper is embezzling funds from the company. The government uses forensic accountants to find corporations who launder money because it is difficult to prove without forensic analysis. Successful forensic accountants know how to find missing or falsified financial data. They use their skills to help stop criminals from cooking the books. Sometimes, forensic accountants even testify in court to prove that a crime occurred.
Becoming a forensic accountant is a great choice for those who like accounting but also like detective work. Forensic accountants are more than just number crunchers because they also conduct investigations to find questionable financial data.