What Does a Forensic Accountant Do?
Forensic accountants track financial transactions and interpret financial data in order to help authorities with a criminal investigation. While forensic accounting is usually used for white-collar crime, obtaining financial information about a suspect can help investigators profile an unknown subject.
What Type of Crimes do Forensic Accountants Investigate?
Forensic accountants aid in the investigation of a wide variety of crimes. These accountants are able to look into financial data from a wide variety of sources and determine illegal activity and unexplained gains or losses of finances. Forensic accountants work with law enforcement officials and lawyers to determine whether illegal transactions have occurred. They investigate different crimes related to fraud and illegal activities, such as:
- corporate fraud
- health care fraud
- mass marketing fraud
- hedge fund fraud
- securities fraud
- money laundering
- contract disputes
- embezzlement
- bankruptcy
Essential Information
Forensic accountants use their skills in finance and accounting to help investigate white-collar crimes. People who steal money through work or their elected positions commit the types of crimes forensic accountants work on.
Forensic Accountant Requirements
Forensic accountants hold a bachelor's degree in accounting or a related subject and usually are Certified Public Accountants (CPAs). They also might qualify for professional credentials as accounting fraud examiners or forensic accountants.
In addition to understanding accounting techniques and financial transactions at corporate and government levels, forensic accountants must have a clear understanding as to what constitutes legal and illegal transactions. They must understand auditing in order to analyze financial, bank and credit statements. Forensic accountants also might need to understand computer technology to get into a suspect's related digital files. A forensic accountant must possess numerous skills including:
- attention to detail - one must be able to see discrepancies across accounts and spot clues of illegal activity
- business acumen - one must understand the day-to-day workings of a business to understand the typical finances of a business and to understand if any records are unusual or indicate illegal activity
- good knowledge of financial reporting and tax legislation - one must be able to recognize if any errors or suspicious activity is occurring and that all reporting is legal and that all taxes are properly paid
Employment of accountants and auditors is anticipated to increase 4% from the years 2019-2029, per the U.S. Bureau of Labor Statistics (www.bls.gov). The BLS also indicated that these workers earned a median annual wage of $71,550 in May 2019.
| Required Education | Bachelor's degree in accounting or another relevant field |
| Certification | Hold CPA designation |
| Job Outlook (2019-2029)* | 4% growth (for accountants and auditors) |
| Median Salary (2019)* | $71,550 (for accountants and auditors) |
Source: *U.S. Bureau of Labor Statistics
How to Become a Forensic Accountant
Forensic accountants require a college degree. Many further their career by obtaining additional certifications.
Forensic Accounting Education Requirements
One of the first steps to becoming a forensic accountant is earning a bachelor's degree. Like all accountants, forensic accountants are required to hold a bachelor's degree in accounting or a related subject. A forensic accounting education often consists of classes in business administration, finance, marketing, economics and statistics. Graduates who earn a graduate certificate or master's degree in forensic accounting can increase their employment and salary potential. Students who didn't major in accounting as undergraduates can also benefit from advanced education in the subject.
Forensic Accounting Continuing Education
After completion of a master's in accounting, one may further their education and pursue a PhD in accounting. On average this doctorate degree will take between four and seven years to earn. This program will require 2-3 years of coursework as well as producing a thesis and numerous works. The completion of this may allow one to teach in this field.
Forensic Accounting Professional Societies
As one moves forward in one's career, there are a number of professional societies that one may join. These include the following:
- Institute of Certified Forensic Accountants
- National Association of Forensic Accountants
- Association of Certified Fraud Examiners
- American Board of Forensic Accounting
- American Institute of CPAs
Certification
Forensic accountants generally are required to have their CPA certification. Graduates must complete a certain number of semester hours beyond a bachelor's degree. In most states, the required number is 30 semester hours. Some schools offer a combined 5-year program for those looking to become CPAs.
A forensic accountant can also become a Certified Fraud Examiner or Certified Forensic Accountant. Two years of experience is necessary to take the applicable exams.
Forensic accountants investigate financial data for the prosecution of crimes. They need a bachelor's degree in accounting or a relevant field, and most are required to hold CPA certification. Forensic accountants can earn Certified Fraud Examiner or Certified Forensic Accountant credentials through examinations and experience.
