If you’re a horror mystery or true-crime podcast addict, you’ve probably heard of forensic science, which applies science to investigating and resolving crimes. Forensic accounting is not so different from this; it only misses blood. Forensic accounting is a sort of accounting known as “following the money.” It examines financial data to search for indications of possible financial wrongdoing.
Using their legal and accounting expertise, forensic accountants examine the financial records of individuals and businesses, interpret their findings, and present them to others. Forensic accounting is a viable option if you’re looking for a finance profession with the possibility of working on exciting, well-publicized cases. To learn more about this field, read below.
What is forensic accounting?
This area of accounting, called forensic accounting, looks into financial data to look for any criminal evidence. Forensic accountants employ their expertise in accounting, auditing, and investigation techniques to determine if an individual or business has engaged in financial misbehavior, such as fraud.
Using legal expertise to assess whether financial behavior is unlawful is one distinctive feature of forensic accounting that sets it apart from ordinary accounting. Forensic accountants also present their conclusions in court.
Investigation accounting and litigation support services are also included in forensic accounting. Finally, it offers a court-appropriate accounting analysis to facilitate discussion, debate, and conflict settlement.
What does a forensic accountant do?
Forensic accountants engage in various tasks, such as document analysis and courtroom testimony, to investigate financial wrongdoing. The field of forensic accounting may be the best fit for you if you’re seeking a financial profession that also involves work in the legal industry.
A forensic accountant’s typical duties include the following:
Statement review: checking for irregularities or indications of fraud in financial statements.
Document review: reviewing bank data, contracts, invoices, and financial papers to conduct investigations.
Fraud detection: Detecting fraudulent activity, such as money laundering or embezzlement, is known as fraud detection.
Asset tracking: Tracing assets is discovering who owns them, where they originated from, and whether or not they were involved in any unlawful conduct.
Data analysis: Analyzing vast volumes of financial data and looking for any irregularities that can point to misbehavior
Interviewing: Speaking with those involved in a case to obtain statements
Expert witness testimony: Giving expert testimony in court, usually to clarify difficult financial topics.
Due diligence: Financial due diligence evaluates the financial standing of a company, an investment, or a person.
Litigation support: offering financial knowledge to assist legal teams in getting ready for trial.
How to get into Forensic Accounting
You’ll need the appropriate training, certifications, and soft and technical abilities to work in forensic accounting.
Education and certifications
Most forensic accountants obtain their professional skills by majoring in a relevant discipline such as accounting, finance, or economics.
CPAs are certified public accountants who have taken the CPA exam and meet certain requirements for education and experience. Similarly, forensic accountants can also complete a set of CFE tests, hold a degree, hold a CPA certification, and have the necessary work experience to become CFEs.
Although these are not necessary, these qualifications can help forensic accountants get better jobs and salaries and offer them more credibility when testifying in court.
Skills required
A forensic accountant must possess a more critical mindset and a broad awareness of the legal system. Their educational background and skill set are frequently comparable to standard accountants/CPAs. They should be prepared to defend their findings in court, which can involve offering expert testimony during a deposition or a trial, among other things.
Final thoughts
Making a career in forensic accounting can be hard, but if you are passionate, it is worth it. If you want to become a forensic accountant, start learning the basics and gain the necessary skills now.