I am often asked what I believe to be some of the rising career fields in accounting. One of those careers that I have heard a lot of chatter about in the past year is forensic accounting.
A forensic accountant has become known as part investigator, part attorney, part auditor, and part accountant.
Forensic accountants often reviews evidence, conduct various analysis, and interviews involved parties to draw a conclusion. They usually prepare their own cases to avoid possible future litigation.
What is Forensic Accounting?
What is forensic accounting all about? Forensic accountants generally are hired after an incident of fraud has been reported, to determine the extent of fraud in order to deliver those involved to face justice. They are frequently called to give credible testimony on accounting and fraud cases as well. A forensic accounting professional is also employed to establish fraud prevention initiatives for major corporations.
Roles & Responsibilities: What is a Forensic Accountant?
So, here is how forensic accounting works. Today, forensic accountants within their expanded role are hired to work all kinds of cases where having knowledge of accounting investigation is extremely important. They must also have the ability to accurately interpret financial statements or to work in circumstances where financial information may have been tampered with or destroyed, by recreating it to establish if fraudulent actions were taken.
A lot of accounting firms today both small and large have developed unique forensic accounting procedures that accommodate a wide array of investigative and litigation needs. Also, private investigation firms have now employed forensic accountants on their staff.
Governmental agencies, such as the Federal Bureau of Investigation, IRS, and state and local police departments, all have forensic accountants that handle their law-enforcement needs. Furthermore, many large corporations also use forensic accountants for their legal and fraud-related issues.
Essential Requirements of Forensic Accountants
In contrast to other professionals, there are no specific requirements of experience that is necessary for someone to call themselves a forensic accountant. Typically, most forensic accountants generally have acquired some knowledge regarding how to conduct actual auditing and accounting cases.
However, auditing and accounting experience alone is not enough to qualify someone to be a called a forensic accountant; one must also have professional experience with conducting actual investigations as well. Forensic accountants usually gain experience conducting investigations from working in law-enforcement or within an accounting firm.
Forensic Accounting Education & Certification Credentials
Most forensic accounts do have a bachelor’s degree in accounting, and have also acquired their CPA certification. A forensic accounting degree is also becoming a preferred option. The main organization which offers forensic accounting certification is widely-known as the (ACFEI), American College of Forensic Examiners International.
This professional and independent association currently represents forensic examiners and forensic accountants all over the world. The credential of Certified Forensic Accountant (Cr.FA) does require for forensic accounts to have a current CPA license, documented experience in investigative and forensic accounting, and have successfully passed their specific certification exam.
Other important credentials for accounting forensics include:
The Certified Fraud Examiner (CFE), which is offered from the Association of Certified Fraud Examiners (ACFE). Receiving this credential does require meeting specific educational and experience requirements, as well as passing their four-part exam which includes fraud prevention and deterrence, fraud investigation, fraudulent financial transactions, and the legal elements of fraud.
The Accredited Valuation Analyst (AVA) or Certified Valuation Analyst (CVA) credentials are from the National Association of Certified Valuation Analysts (NACVA). This organization supports professionals that are involved in financial forensics, and related advisory services.
The National Association of Forensic Accountants (NAFA) Certification. This credential requires applicants to have a current CPA license and have also completed their specific forensic accountant training.
The Journal of Forensic Accounting is an ongoing journal by an independent international forum that shares best practices of forensic accounting as it relates to auditing, fraud and risk. Two semi-annual issues are published each year that are approximately 130+ pages in length.
Forensic accountants have definitely earned the titles of part investigator, part attorney, part auditor, and part accountant. The need for this specialized professional will undoubtedly increase, as the effects of fraudulent activity continues to impact the world. There are more and more forensic accounting jobs coming onto the scene each year.