Unfortunately, many accountants, even those with years of experience, lose interest in reading professional journals or furthering their knowledge through the study of a new specialty area. Those who do stay academically motivated, however, will come across numerous articles on the topic of forensic accounting. This topic, and several connected to it, is well worth keeping abreast of; for example, fraud is in the news on a daily basis, as whistle-blowing and class action lawsuits leading to large fines, and even criminal charges, levied on those responsible. CPA firms are sometimes brought into the mix, since the public wants to know what the accountants knew and what is in their workpaper files. If the CPA firm has culpability, it can be charged, with the same financial consequences. Developing a curiosity about such cases provides professionals with valuable insight in terms of what happened, why it happened, and how could it have been prevented—questions frequently posed by fraud victims.
This basic reading of accounting journals and news publications may lead to a larger interest in forensic accounting. At this point, a career can become dynamic and energized; by focusing efforts on a specialty area, it becomes easier to remain highly motivated and determined to succeed.
There are many career paths in forensics for accounting graduates, whether they work for a nonprofit organization, private company, university, hospital, or government. Forensic knowledge is most helpful for those employed in the nonpublic sector, with higher value and compensation awarded to highly credentialed forensic specialists. Controllers and internal auditors should have a working knowledge of forensic accounting as well. A CPA who attains forensic skills and then moves to a private accounting position can expect higher rewards, as there is a growing need for these skills across the spectrum.
Forensic accounting is not a complicated concept; it is essentially litigation support involving accounting. The application of forensic accounting techniques is also fairly straightforward. Forensic accountants apply their skills to legal cases to answer questions regarding damages, generally with an economic bearing, or where there is a concern expressed by a company potentially experiencing fraud or suffering from deficient internal controls. Forensic accounting skills are also useful in assisting the audit team with fraud-risk assessments, where it is vital to know how to ask probative questions in a non-threatening manner.
Digital forensics is a fast-developing subspecialty within forensic accounting, as today’s complex fraud schemes sometimes require digging through very large databases to detect patterns of fraud and expose efforts to conceal it—a basic component of the fraud triangle. In this regard, it is important for a forensic accountant to appreciate that the fraudster is just as smart as the investigator. Thus, a forensic accountant becomes part detective, uncovering evidence to prove the existence of a crime. In civil cases, forensic accountants attempt to compile sufficient evidence of fraud and data manipulation to develop a defensible case for the recovery of damages.
CPAs who gain knowledge of forensic accounting through reading, specialized continuing professional education, and hopefully hands-on client experience, will be more prepared to market their skills and add value to their client engagement teams. Earning the CPA designation is a fine start, but the road to success is paved with other achievements—forensic knowledge being one of them.