Forensic Accountant - New Career? by Rebecca Game
One of the newer areas, and also the fastest growing area, of accounting is forensic accounting. A forensic accountant has a unique job because the responsibilities involve the integration of accounting, auditing, and investigative skills. Using all of these skills, a forensic accountant is, in summary, a true investigator. Forensic accountants are trained to look beyond the numbers and deal with the business reality of the situation.
A forensic accountant is typically an accountant that is hired by a large firm or company, but can also be engaged in public practice, or can be employed by insurance companies, banks, police forces, government agencies, or other organizations. The forensic accountant would be hired by such organizations to investigate, analyze, interpret, summarize, and present complex financial and business information so that it can be easily understood and properly supported. One that is employed as a forensic accountant can assist corporations in two main ways.
1. Investigative Accounting
By performing investigative accounting duties, a forensic accountant reviews the factual situation of the company and suggests possible courses of action. A forensic accountant can also assist with the protection and/or recovery of assets, and can coordinate with other experts such as private investigators, forensic document examiners, and consulting engineers in the event that a white-collar crime has occurred. The forensic accountant will also assist with the recovery of assets by way of civil action or criminal prosecution.
2. Litigation Support
Another main duty of a forensic account is to assist in obtaining documentation to form an initial assessment of the case and identify areas of loss. The forensic accountant may review the relevant documentation to assess the case and identify loss. This may require the financial accountant to assist with settlement discussions and negotiations, as well as attend a trial to hear the testimony of the opposing expert, and to provide assistance with cross-examination.
Forensic accountants become involved in an array of investigations. This may involve:
- Criminal Investigations, where a forensic accountant may be required to prepare a report with the objective of presenting evidence in a professional and concise manner;
- Shareholders' and Partnership Disputes, involving assignments that require a detailed analysis of numerous years of accounting records in order to resolve, for example, compensation and benefits disputes of shareholders or partners;
- Personal Injury Claims, when a forensic accountant is asked to quantify economic losses resulting from an accident, often calculating resulting economic damage in cases of medical malpractice and wrongful dismissal;
- Business Interruption, reviewing the details of an insurance policy, for example, to investigate coverage issues and the appropriate method of calculating the loss of areas such as business interruptions, property losses, and employee dishonesty (fidelity) claims;
- Fraud Investigations, which involves a forensic accountant's work in determining funds tracing, asset identification, and recovery, most commonly performed with employee fraud cases;
- Matrimonial Disputes, which require a forensic accountant to trace, locate, and evaluate assets, including businesses, properties, and other personal assets;
- Business Economic Losses, that of which includes areas such as contract disputes, construction claims, expropriations, product liability, trademark or patent infringements, and losses occurring from a breach of a non-competition agreement;
- Professional Negligence, either through a technical perspective, where the forensic accountant will investigate a breach in an agreement, or through a loss quantification; and
- Mediation and Arbitration, where a forensic accountant may be hired to become involved in an alternative dispute resolution so that individuals and businesses may resolve disputes with minimal disruption and with a minimal amount of time.
While each forensic accountant will receive a unique assignment with each client, most assignments will include the following steps.
1. Meet with the client to understand the important facts, people, and issues at hand.
2. Perform a conflict check.
3. Perform an initial investigation.
4. Develop an action plan, setting objectives to be achieved, as well as the methods that should be used to accomplish them.
5. Obtain relevant evidence that may include documents, economic information, assets, or other proof of the occurrence of an event.
6. Perform the analysis, which may involve calculating economic damages, summarizing transactions, tracing assets, performing present value calculations, performing a regression or sensitivity analysis, utilizing a spread sheet, database, or other computerized model.
7. Preparing a final report.
A forensic accountant may be hired by a variety of institutions, including attorneys and law firms; police forces; insurance companies; government agencies; banks, credit unions, and financial lenders; courts; and business owners. They may hire a forensic accountant based on their experience and qualifications, as well as their neutrality to their particular situation, especially if damages are involved.
The typical forensic accountant will have a minimum of a bachelor's degree, and often a master's degree, in accounting or a related field. A forensic accountant is also usually a Certified Public Accountant (CPA). In addition to education, a forensic accountant should have personal characteristics that include curiosity, persistence, creativity, discretion, strong organizational and communication skills, confidence, and sound professional judgment. Forensic accounts that find the most career success are extremely detail-oriented as well. A forensic accountant may be employed by an accounting firm or by a large corporation to perform in-house investigations, or may be self employed as a consultant to such organizations.
About the Author
Rebecca Game is the founder of Digital Women ®, Digital-Women.com, an online community for women in business. She is a 30 year entrepreneur and dedicated to helping other women find business loans and business grants. Visit her site: Business Grants and Loans for Women
http://www.digital-women.com
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