Forensic Accounting - A Basic Guide

By Matthew Richard Kerridge

While traditional accountants are hired to simply look at the numbers, forensic accountants are hired to look beyond the numbers. For this reason, they must possess considerable knowledge of accounting, auditing, investigative, and legal practices. These professionals are indispensable in assessing whether or not financial statements and other accounting records reflect reality. They also play a key role in mitigating the risk of future fraudulent activities by recommending and implementing stringent system controls through various types of enterprise risk management and audit committee advisory services. They are typically offer their clients expert witness testimony and discovery assistance during trials as well.

They are often hired to work on corporate mergers and acquisitions (valuating business assets and verifying inventories), divorces (determining equitable income distribution and child support payments), and personal injury claims (calculating economic damages and losses). Other common assignments for them include investigating matters such as identity theft, employee theft, securities fraud, bankruptcy claims, and underwriting concerns.

Forensic accounting is one of the fastest growing accounting fields, and it has generated an increased amount of public attention because of a proliferation in white-collar crimes like money laundering, fraud, and embezzlement. The accounting scandals at Enron in 2001 generated significant media coverage, and accountants have been actively involved in tracing global terrorist activities since the 9/11 terror attacks.

A bachelor's degree in accounting is required for employment as a forensic accountant, and many in the field have earned CPA certification as well. There are even Certified Fraud Examiner (CFE) and Certified Forensic Accountant (CrFA) certifications available for those wishing to pursue this career field. These accountants are employed in private corporations, police departments, banks, law firms, insurance companies, and government agencies such as the IRS, the FBI, and the CIA. The salary range in forensic accounting varies widely from $30,000 to $150,000 in annual compensation. They are also known as investigative accountants, fraud investigators, and forensic auditors.

Business valuations and forensic accountant services related to commercial disputes are niche services available at financial firms. If you need to know more about forensic accounting, and why and when you might need it, why not visit the BTG Forensic website for details on how the cases are dealt.

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