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What Is Forensic Accounting?

Forensic accounting is a fast-growing field in law enforcement with career opportunities available at the state and federal levels, as well as in the private sector.

Texas A&M University-Corpus Christi offers an online Master of Business Administration with a Concentration in Accounting. This concentration includes Forensic Accounting, a course that covers the concepts and skills of investigations. It focuses on the methods and technological tools used to detect occupational fraud, including conducting investigations, interviewing witnesses and suspects, writing investigation reports, and providing expert testimony. State and law enforcement agencies, as well as corporations and accounting firms, need accountants with MBA training geared specifically for this challenging field.

The Employers

Forensic accountants and CPAs who work in accounting often work for the Federal Bureau of Investigation (FBI), the United States Secret Service, large corporations, and public accounting firms. Many also work for banks, insurance companies and other financial institutions.

The Daily Work

Professionals in forensic accounting work in litigation support and investigation. In both areas, they use their skills to conduct examinations and investigations of companies' financial statements, write reports and assist in depositions. Their analyses are "suitable to the court, which will form the basis for discussion, debate and ultimately dispute resolution," according to Forensic Accounting Demystified.

The daily duties of a forensic accountant include conducting forensic audits, recognizing irregularities and discrepancies in accounting, identifying breaches in contracts, and reviewing financial statements. They are often involved in preparing witnesses for trial or preparing themselves to give expert witness testimony themselves in criminal and civil cases. Sometimes they work on product liability claims or trademark and patent infringement cases.

In criminal case proceedings, forensic accountants often make the determination as to whether a crime occurred. Crimes include falsification of financial statements, securities fraud, embezzlement and employee theft. In business investigations, cases may require asset identification and recovery, due diligence reviews, and the tracing of funds. In civil proceedings, forensic accountants may find hidden assets in a divorce case, perform business valuations, and quantify losses and economic damages in a lawsuit.

The skills that make forensic accountants unique among certified public accountants include the following:

  • Investigative capabilities similar to those of other forensics experts.
  • Training in the detection of fraudulent and illegal financial activities.
  • Ability to identify financial irregularities that can trigger an investigation or help to solve criminal and civil cases.
  • Responsiveness to financial crises and charges of criminal wrongdoing.
  • Understanding of business concepts and applications beyond finances.

Dr. Larry Crumbly, editor of the Journal of Forensic Accounting remarked, "You have an external auditor -- that's like a guard dog. Maybe a bulldog," he said. "An internal auditor is a seeing-eye dog. A forensic accountant is a bloodhound."

The Career Prospects

Demand for such "bloodhounds" is high, and salary prospects are strong. As of December 2017, the total pay range for forensic accountants is $44,009 to $100,660, according to PayScale. If you are interested in financial matters and want to use your keen observational and analytical talents, this career is well worth your consideration.

Learn more about TAMU-CC's online MBA with a Concentration in Accounting program.


Sources:

Forensic CPA Society: What Is a Forensic Accountant?

Investopedia: Forensic Accounting

Forensic Accounting Demystified

PayScale: Forensic Accountant Salary

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