Knowing how to become a forensic accountant may just provide you a different career, not commonly traveled by people in the accounting profession. Forensic accounting is not entirely a new thing. In fact, its practice or the semblance of it has been seen in ancient Egypt when scribes were appointed by the Pharaoh to account for his vast assets. Forensic accounting is essentially the application of accounting principles to specific legal issues such as frauds, embezzlement, bankruptcy, and contract disputes.
What is a Forensic Accountant?
A forensic accountant is an accountant who seeks to determine the existence or absence of irregularity in companies as can be traced in financial documents. This type of accountant is tasked to investigate, analyze, and prepare the corresponding reports in relation to suspected commission of accounting irregularities, use of improper accounting methods, or direct fraud.
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Although all financial accountants generally function to determine the soundness of a company’s financial statements, forensic accountants have specific training and capabilities to act for the successful litigation of the case. The work performed by forensic accountants is often done in preparation for litigation and they may be called upon to serve as expert witnesses in the case.
The services of forensic accountants are usually sought for fraud investigations such as employee theft, insurance fraud, kickbacks, identity theft, securities fraud, healthcare fraud, and Medicare fraud, among others. Aside from proving irregularities and frauds, the results of the investigation can be used to minimize future risks. The federal government is one of the major employers of forensic accountants because of the large amount of funds that exchange hands in transactions with government agencies.
Education and Training
All aspiring forensic accountants must possess a bachelor’s degree. If the degree is not related to accounting, the applicant must have taken at least 24 credit hours of accounting classes. A master’s degree in accounting however, is required and one which is specific for forensic accounting is highly encouraged.
The job market for forensic accountants is highly competitive thus job applicants are advised to take advantage of professional certification programs to remain updated with current practices. Passing the CPA Exam and the CFE Exam is advantageous to any applicant. While the CPA Exam deals with the general practice of accounting, the CFE Exam focuses on understanding how and why fraud happens.
Becoming a Forensic Accountant
Becoming a forensic accountant requires applicants to conform to educational and experiential requirements due to the high degree of experience required in the performance of the job. Individuals who have remarkable curiosity, extraordinary persistence, specific attention to detail, ability fro creative thinking, effective communication skills, and commendable skills in research and analysis, in addition to strong accounting skills and legal knowledge will make good forensic accountants. Special attention should also be given to attaining proficiency in different accounting and auditing software programs.
Passing the CFE Exams allows an accountant to be a member of the American College of Forensic Examiners (ACFE). This organization can be a great source of information and networking opportunities to widen career options. Make sure you know how to become a forensic accountant before deciding.