Most people wonder how companies find out when fraud is occurring. In most cases, they use forensic accounting. Forensic accounting is analyzing financial information in detail to detect and investigate fraud or embezzlement. What is forensic accounting all about? Forensic accounting involves two areas: investigation and litigation support. One of the main considerations depending on what accounting forensics is the investigative piece. Forensic accounting is very detail-oriented, with a large amount of the work in data and analytics; in fact, forensic accounting is often closely related to cybersecurity.
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Forensic accounting is a good fit for someone who enjoys working with numbers and has good investigative skills. You’ll find forensic accountants being pulled into white-collar crimes, embezzlement, and even by private investigators to locate hidden assets. Forensic accounting is a career many people don’t think of, but the need for forensic accounting in the business world is a necessity.
What Does a Forensic Accountant Do?
The job description for a forensic accountant varies. Although they have a fiscal responsibility, they do a lot more. A forensic accountant inspects financial records for use in court or criminal cases. Some additional duties include:
Forensic accountants are very detailed. They generally use four steps to review, analyze, balance and document their findings. They inspect and review company financials, profits and expenses to ensure there are no inconsistencies. They also make sure all financials are in compliance. The written report comes at the end.
One of the main jobs of a forensic accountant, like that of most accountants, is to examine the financial accounts and data of an organization. Although they have specialized skills, they are also often tasked with standard accounting and bookkeeping for their organizations.
The job description of a forensic accountant also involves analyzing data. They work with other accountants in performing interviews to gather the data they need. This job can take a lot of time, especially if there are issues with the numbers and findings. Forensic accountants look for different types of errors, cross-checking along the way. They may have to conduct interviews and inspect data two or three times before they are satisfied.
With investigation being a huge part of forensic accounting duties, the forensic accountant is responsible for tracing the money, identifying all assets and expenses, and determine if they are real or fraudulent. This usually occurs as a final step prior to the information being given to the management team or the courts.
A forensic accountant appears in court on the company or investigator’s behalf. They must be detailed and thorough, reviewing their reports for 100% continuity. They are frequently asked to provide testimony as evidence.
Requirements to Become a Forensic Accountant
There are a number of steps to achieve forensic accounting qualifications. First, the forensic accounting requirements call for a bachelor’s or master’s degree in forensic accounting, accounting, finance or a related field. These forensic accounting qualifications will help them to achieve forensic accounting certification.
Practicing accountants must have a Certified Public Accountant (CPA) designation. The accountant should plan to explore a degree specifically designed for forensic accounting. This will help them achieve the forensic accounting certification, which entails passing the exam and ACFE certification requirements.
Students may elect to obtain a graduate certificate in forensic accounting in lieu of a master’s degree if they already have obtained their CPA designation and are working in the field. This track is usually for internal auditors, qualified accountants, fraud investigators and others working in these fields.
Knowledge, skills and abilities for this field include the ability to write reports, communicate with others to testify as an expert witness, interpersonal, verbal and written communication; attention to detail; analytical skills; integrity; objectivity; independence and credibility.