What is Forensic Accounting?

What is Forensic Accounting?

Auditing and accounting is an unlikely combination, but that's what forensic accounting is all about. Forensic essentially means 'anything that is suitable to be used in a court of law', and this is exactly what forensic accountants do.
Forensic accounting essentially encompasses three major areas ― investigation, dispute resolution, and litigation support.

What is Forensic Science?

Investigation is that act which determines whether or not certain criminal matters like securities fraud, identity theft, employee theft, and insurance fraud has actually occurred. A major part of a forensic accountants job would be to recommend certain actions that can be taken to minimize any future loss or risk. Not only does investigation occur in criminal cases, it can take place in civil cases too. For instance, it is the duty of these professionals to search for hidden assets, if any, in divorce cases.

Litigation support on the other hand involves presenting factual evidence of economic issues, that are related to any pending or existing litigation. In such a case, it is the responsibility of these professionals to quantify damages that could be sustained by the parties involved in any legal dispute. They also help by resolving disputes during courtroom proceedings. If a dispute is brought to the courts notice, they can testify as witness.

This world involves grasping the seriousness of a situation and looking way beyond mere numbers. It is more than just your regular accounting or basic detective work. Because it has such unique elements, it is an unusual combination that has been and will always be in demand as long as the human race exists.

Becoming a Forensic Accountant
  • The way to get started is to earn a Bachelor's degree in a field like accounting. This Bachelor's degree is a regular four-year course that is available at most universities and colleges, and many universities are now offering it as a distance learning program online.
  • Your next step would be to get prepared for the Certified Public Accountant exam in order to become a CPA. There are many online preparatory courses, that are available to assist you in passing the exam.
  • Once you clear the CPA exam and earn a Bachelor's degree in accounting, you can formally start the practice. However, in order to get started the best way, you should also consider going to graduate school.
  • These days, a Master's Degree in this subject is also available in two forms ― as the traditional Master's degree and as an MBA program with a focus on this field.
  • Earning graduate degree will serve many purposes ― one being that it can further train you to work and the other that it will also serve to fulfill the educational requirements, that are required for you to maintain your unique CPA status.
  • Apart from this, you will also be able to find extra coursework in other areas like criminal justice and law enforcement, which can be of great help, and legal training will also be of use.
  • In addition, you could also pursue a CFE accreditation or a Certified Fraud Examiner accreditation from the Association of Certified Fraud Examiners. This accreditation is nationally recognized and is very similar to the CPA exam.
  • Lastly, you could also pursue a CrFA accreditation or a Certified Forensic Accountant accreditation.
These professionals are experts that use a unique combination of experience and education to apply auditing, accounting, and investigative skills in order to uncover the truth, assist in investigations, and form legal opinions. If this sounds interesting to you, then you should seriously contemplate making this field your career.