A career in Forensic Accounting is a lucrative option these days. It is a high profile job that comes with good pay package, stability and an interesting work profile. The job of forensic accountant is more of a private investigator with prime focus on the financial matters. Far from traditional accounting and auditing forensic accounting becomes exciting as it deals with crimes and legal matters such as financial fraud, identity theft and insurance fraud, etc. It entails looking beyond statistics to take a holistic approach to analyze entire situation like a detective. Therefore it is needless to say that as long as human civilization exists there will be demand for forensic accounting auditing.
Forensic Accounting: How it differs from Traditional Accounting
Although forensic accounting share characteristics familiar to stereotype accounting, but that is at a rudimentary level. As you go deeper into the matter the difference in the work procedure, required skill set and the role-play becomes evident.
First, the service demands forensic accountants to deal with a variety of situations other than preparing a financial audit report. Unlike a certified public accountant that reviews financial transactions only, a forensic accountant is entitled to identify financial fraud and inspect on that. Offering suggestions to mitigate the risk of fraud and theft is part of the job as well.
Secondly, traditional accounting has limited scope with a focus on error detection, rectification and prevention. On an extended note, forensic accounting covers a wide area including:
- Business purchases
- Property damage
- Divorce asset evaluation
- Tax avoidance
- Lost profits due to misuse and illegal activities
- Money laundering
The job of a Forensic Accountant
The job, to be specific, blends the knowledge of an auditor with the skills and intelligence of an investigator. The required skill set or the job includes:
- Good research ability
- In depth knowledge in finance and auditing
- Investigation skills
- Exposure to law
- Understanding of applied psychology
After analyzing the matter, a forensic auditor should deduce and present complex financial matter in a manner easily understandable to non-accounting persons. He or she should analyze financial data; detect fraud using standard analytical tools, organize the findings in form of reports and documents and finally assist the legal proceedings and trials regarding the matter.
With increasing complexities in business financial matters forensic accounting forks into more specialized compensation claims, insurance claims, fraudulence and royalty audits.
Who recruit Forensic Accountants
Both governmental agencies and private accounting firms recruit forensic accountants. Governmental organizations such as FBI, CIA and IRS or Internal Revenue Service hire forensic accountants for various investigation purposes. On the other hand, private firms and major corporate concerns employ them for investigating mergers, tax and acquisitions and theft.
Useful resources:
Take a guide to a forensic accounting, visit www.msgcpa.com