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Career in Fraud and Forensic Accounting

Forensic accountants are financial detectives who audit, investigate and ascertain the accuracy of financial reporting documents, often in connection with anticipated or ongoing legal action. They are charged with ferreting out questionable financial data, chiefly for the purpose of investigating white-collar crime involving individuals as well as businesses of all sizes. They may work with businesses, nonprofit organizations (including government and law-enforcement agencies), estates, individuals and others who require forensic-accounting services.

Recent regulations have made forensic accountants widely sought after, and there are many career options available for those who are interested. Read on to find out if this career, which offers a high level of satisfaction and competitive compensation, is right for you.

Overview Of Forensic Accounting: What The Work Entails
Forensic accountants may help with risk management and risk reduction through customized design of accounting and auditing systems and procedures. As a function of due diligence and investment analysis, they will advise on a wide variety of financial transactions:

    * Contemplated mergers and acquisitions
    * Venture capital investments
    * The purchase of corporate bonds, commercial paper and stocks
    * Bankruptcy proceedings

The criminal activity uncovered may include fraud, embezzlement, money laundering, the concealment of debt, the concealment of assets or other fraudulent activities, or even financial crimes. Forensic accountants may be called upon to testify in court as expert witnesses in criminal and civil litigation and appear in pretrial depositions.

Beyond their typical work in the business sector and the investigation of individuals' assets for various legal purposes, forensic accountants may also examine criminal enterprises to recover illegally obtained money or spot money laundering. In tax cases against individuals or companies, the work of a forensic accountant is indispensable.

Forensic accountants are also often Certified Fraud Examiners (CFE). A Certified Fraud Examiner is a specialist with extensive training in the prevention and deterrence of fraud and is required to pass a 500-question examination for certification that covers topics such as fraud examination and investigation techniques, financial transactions, criminology and ethics, and legal elements of fraud. Requirements for certification also include high moral character and strict professional and academic standards.

The CFE credential is conferred by the Association of Certified Fraud Examiners. The certification is recognized worldwide, and employers look for it when forensic accounting is needed in this area.

Both the forensic accountant and the CFE must have a comprehensive understanding of business information and all aspects of financial reporting, including: 

    * The balance sheet showing a business's assets, liabilities and net equity at the time of the report
    * The income statement, which reports the profit or loss of a company over the reporting period
    * The statement of retained earnings, which reports dividends paid and other items credited to or charged against earnings. This data may also be included in the balance sheet.
    * The statement of cash flows showing the cash coming into the company (inflow) and going out of the company (outflow). Cash equivalents - short-term government bonds or Treasury bills, marketable securities and commercial paper or debt - also appear in the statement of cash flows.

Reported information in these documents must comply with generally accepted accounting principles (GAAP), which spell out accounting rules and procedures.

Becoming A Forensic Accountant
The CFE credential requires a course of study and an examination.

Courses in forensic accounting are offered at many colleges and universities, other private institutions and through online educational programs.

Job Opportunities, Career Paths And Compensation
Forensic accounting can be a fascinating and well- paid occupation.  Salaries depend on experience, years in the profession and the type and size of the entity - a small business will most likely pay less than a major corporation, for example, and a nonprofit organization may pay less than a for-profit organization.

New legislation, such as the Sarbanes-Oxley Act, has created many new job opportunities in this field. The Act, which requires stricter accounting and reporting standards for corporations, came in response to corporate and accounting scandals and seeks to promote fraud prevention, accountability and greater transparency.

The Journal of Forensic Accounting and ForensicAccounting.com provide information about potential job opportunities.

Conclusion
Forensic accounting can be a fascinating, satisfying and well-compensated career. The field is expanding, and there are numerous job opportunities in the private sector, government and other nonprofit organizations. The work is beneficial to the community, and the profession is highly respected.