According to the Forensic CPA Society, the definition of forensic accounting is “the specialty practice area of accounting that describes engagements that result from actual or anticipated disputes or litigation.” In everyday language, forensic accountants are investigators who examine financial records for irregularities or illegal activities, such as fraud.
The job market for forensic accountants is highly varied. Employers include government agencies such as the Federal Bureau of Investigation (FBI), the Central Intelligence Agency (CIA), and the Internal Revenue Service (IRS); accounting firms, law firms, and financial consulting firms; and large corporations requiring in-house experts in the areas of corporate security and risk management.
Because of the highly specialized and ever-evolving nature of forensic accountancy, employers are increasingly looking for candidates with advanced degrees such as a Master’s Degree in Accounting (M.Acc.). The University of North Dakota’s Masters in Accountancy online offers a convenient path to this degree, which may lead to a forensic accounting position or many other careers in accounting.
What Forensic Accountants Do
The Association of Certified Fraud Examiners (ACFE) explains that forensic accountants combine their accounting knowledge with investigative skills in various litigation support and investigative accounting settings. Unlike auditors, who typically take a standardized approach to their work, forensic accountants must determine which areas, people, or functions require their attention. Because fraud is usually hidden, this process can be difficult and time-consuming. By understanding typical fraud schemes and applying specific data analysis techniques, forensic accountants are able to perform investigations efficiently and strategically.
The Forensic CPA (FCPA) Society explains that the field of forensic accounting encompasses two primary areas:
Litigation support. Many court cases have financial aspects. Forensic accountants can ensure that these issues are presented factually and fairly. They may also be called upon to quantify damages sustained by parties involved in legal disputes—in other words, to come up with appropriate settlement figures. They can also assist in resolving disputes before they reach the courtroom.
If a dispute does reach the courtroom, the forensic accountant may testify as an expert witness. “Knowledge of the courtroom sets the forensic accountant apart from a typical accountant,” explains the FCPA Society.
According to the website Accounting.com, specific job responsibilities associated with litigation support may include:
- Gathering evidence for and assisting in the execution of search warrants
- Translating complex financial findings into simplified language
- Meeting with prosecutors to discuss strategy
- Assisting in finding financial experts for testimonies
- Testifying as expert witnesses
- Quantifying financial losses due to misconduct
Investigation. If a company suspects theft, fraud, or embezzlement, a forensic accountant may be brought in. He or she will examine financial records and follow any suspicious leads to see if the numbers reflect reality. Investigation may also occur in civil matters. A forensic accountant may be hired, for example, to search for hidden assets in a divorce case.
Accounting.com lays out the following investigation-related job responsibilities of forensic accountants:
- Investigating the financial history of subjects and building financial profiles of these individuals
- Compiling broader financial investigative reports
- Performing computer forensics
- Conducting fact-finding interviews
- Taking part in interrogations
- Tracking illicit funding sources
A growing third area of expertise for forensic accountants is the field of corporate security and risk management. Accounting.com states that forensic accountants employed in this capacity may be expected to:
- Protect financial assets from internal and external threats, including political issues and economic circumstances
- Analyze changes in law, taxes, exchange rates, and cultural attitudes and their influence on operations and profits
- Ensure organizational compliance with laws and procedures
- Audit financial statements for risk
Salary and Job Outlook
Becoming an accountant requires a minimum of a bachelor’s degree, but additional education is increasingly attractive to today’s employers. Candidates who pass the Certified Public Accountant (CPA) exam or who earn a Masters in Accountancy (M.Acc.)—or, preferably, both—position themselves for career success.
According to the Bureau of Labor Statistics, growth in all accounting fields will be higher than average through 2020. The increasing incidence of fraud also makes it likely that the demand for people to investigate financial crimes will increase, creating a greater need for forensic accountants.
With their specialized knowledge, forensic accountants can expect to enter the workforce at a competitive salary. According to Payscale.com, the median pay for forensic accountants as of March 2019 was $65,607, with an overall range of $44,846–$107,565. Factors contributing to individual pay rates include education, certifications, additional skills or areas of specialization, and years of experience.
University of North Dakota’s Master of Accountancy online degree
University of North Dakota’s Master of Accountancy (M.Acc.) online program helps students master accounting principles as well as related skills necessary for a successful career in forensic accounting or other areas of the financial field.
UND is accredited by the Association to Advance Collegiate Schools of Business International, which only recognizes about 30 percent of business programs in the United States. The Master of Accountancy online program offers practitioner and fundamentals tracks. Coursework is done online, which allows busy professionals to study accountancy and earn their degree without disrupting their work or personal lives. For more information, contact UND today.
Forensic accounting definition – Forensic CPA Society
Job market and primary areas of forensic accounting – Forensic CPA Society
Difference between forensic accounting and auditing – Association of Certified Fraud Examiners
Job responsibilities of forensic accountants – Accounting.com
Job growth outlook – The Balance Careers
Degree requirements and pay scales – Payscale.com