What is Forensic Accounting Career?
Forensic Accounting is that branch of accounting that requires you to not only apply your financial skills but forces you to analyze the cases with an inquisitive bent of mind. As such, as a forensic accountant, you should possess strong knowledge of the current business setting, advanced financial skills, and a sound understanding of the law of the land.
According to a study by Maryville University (https://online.maryville.edu/blog/the-growth-of-forensic-accounting/), the forensic accounting industry has witnessed significant growth (CAGR of 7.8% during 2012-18) during the last couple of years to stand at $16.3 billion at the end of 2018. As per the IBIS world (https://www.ibisworld.com/united-states/market-research-reports/forensic-technology-services-industry/, https://www.ibisworld.com/united-states/market-research-reports/digital-forensic-services-industry/), the US forensic accounting industry is worth more than $4 billion.
What is Forensic Accounting?
Forensic Accounting is that branch of accounting that requires you to not only apply your financial skills but forces you to analyze the cases with an inquisitive bent of mind. As such, as a forensic accountant, you should possess strong knowledge of the current business setting, advanced financial skills, and a sound understanding of the law of the land.
Per the American Institute of Certified Public Accountants (AICPA), forensic accounting is the application of solid knowledge of accounting and fact-finding skills intended to defraud financial crimes. In other words, forensic accounting involves the collection, analysis, and evaluation of financial information to track down shreds of evidence of fraud.
Application of Forensic Accounting
Some of the significant applications of forensic accounting are as follows:
- Detection of suspected internal fraud by employees within the organization
- Extend help department of Police and Law in a criminal investigation
- Assist a retiring partner in case of an unjust settlement
- Assessment of significant losses due to personal negligence
- Arbitration and mediation to settle intellectual property infringements, contract disputes, liability claims, etc.
Career Path of Forensic Accountants
In Forensic Accounting Career, Although various career options are available for a forensic accountant, we have listed some of their most common career paths.
1. Governmental Departments (FBI, CIA, IRS)
Responsibilities:
In this role, the primary responsibilities are as follows:
- Investigation of financial activities of spies, terrorists, and criminals
- Tracking financial profiles of the suspected individuals
- Acquisition of pieces of evidence and extending assistance for executing search warrants
- Extending help during criminal interrogations
- Locating sources of illegitimate funding
- Building reports for financial investigation
Educational and Experience Requirement:
At the entry-level, a forensic accountant should have the following educational and professional background:
- Bachelor’s degree in accounting or a related field
- More than one year of relevant experience
- Clearance to access top-secret security documents
- Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE) certifications are recommended
At mid-level, a forensic accountant should have the following educational and professional background:
- Minimum one year of experience at the GS-12 level
- Broad understanding of the criminal statutes and the legal proceedings
- Ability to prepare detailed reports suitable for courtroom use
- Sound knowledge of various digital accounting software
Salary:
The annual salary is in the range of $65,000 to $115,000.
2. Accounting Firm
Responsibilities:
In this role, the major responsibilities are as follows:
- Exposing frauds and gathering evidence against them
- Decoding technical jargon into more comprehensible language
- Conducting forensic investigations on computer
- Performing investigative interviews
- Assessment of financial losses due to individual misconduct
Educational and Experience Requirement:
At the entry-level, a forensic accountant should have the following educational and professional background:
- Bachelor’s degree in accounting or a related field
- At least one year of experience in forensic accounting or three years of experience in auditing
- Preferable qualifications include CFE and CPA
- Strong communication skills
At mid-level, a forensic accountant should have the following educational and professional background:
- Around 3 to 5 years of experience in investigative auditing
- A Master’s degree is preferable
- Other preferable qualifications include CFE or Certified in Financial Forensics (CFF)
Salary:
The annual salary is in the range of $55,000 to $75,000.
3. Corporate Security & Risk Management
Responsibilities:
In this role, the primary responsibilities are as follows:
- Protection of financial assets against internal and external threats
- Analysis of ongoing changes in taxation, law, exchange rates, etc.
- Making sure that an organization is compliant with the applicable laws and regulations
- Conducting risk audits of financial statements
Educational and Experience Requirement:
At the entry-level, a forensic accountant should have the following educational and professional background:
- Bachelor’s degree in accounting or a related field
- Ability to conduct an operational review of processes within an organization
- Strong understanding of industry-related compliance regulations
- Preferable qualifications include CFE, CFF, or CPA
At mid-level, a forensic accountant should have the following educational and professional background:
- Bachelor’s degree in accounting or a related field
- Around 3 to 5 years of relevant experience
- Detailed knowledge of industry best practices
- Either CFE or CFF credential is recommended
At the senior level, a forensic accountant should have the following educational and professional background:
- Bachelor’s degree in accounting or a related field
- Around 5 to 8 years of relevant experience
- Experience in supervising and managing a team of auditors
Salary:
The annual salary is in the range of $102,250 to $184,875.
4. Financial Consulting Firms
Responsibilities:
In this role, the major responsibilities are as follows
- Investigation of frauds, regulatory breaches, and acts of corruption
- Analysis and rebuilding of financial records
- Conducting fact-finding interviews
- Assessment of vulnerability to fraud
- Investigation of embezzlement allegations
Educational and Experience Requirement:
At the entry-level, a forensic accountant should have the following educational and professional background:
- Bachelor’s degree in accounting or a related field
- Around two years of experience
- CPA is preferable
- Knowledge of advanced excel skills
At mid-level, a forensic accountant should have the following educational and professional background:
- A Master’s degree is preferable
- Around 3 to 5 years of experience
- Recommend CFE or CFF certification
Salary:
The annual salary is in the range of $63,000 to $125,000.
Conclusion
Forensic accounting gained traction at the global level after the Serious Fraud Investigation Office (SFIO) was founded in America. Since then, the forensic accounting industry has been growing at a substantial rate. So, it is the right time to switch to a career in forensic accounting and have a bright professional future.
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