Forensic accounting is the specialty practice area of accounting that describes engagements that result from actual or anticipated disputes or litigation. “Forensic” means “suitable for use in a court of law”, and it is to that standard and potential outcome that forensic accountants generally have to work.
Forensic accounting is a concentrated field that involves gathering evidence about economic transactions, and how they were accounted for. This profession is about the legal aspects of monetary transactions and finding out where money was spent and by whom for the purpose of establishing accountability. Forensic accountants are normally Certified Public Accountants.
What They Do:
Forensic accountants are basically detectives of monetary transactions. They gather information to follow the path of these transactions and analyze and interpret business and financial evidence. They are often called as expert witnesses in trial situations.
They often work on cases like fraud, white-collar crime, divorce and business valuation.
Forensic accountants use their business acumen and knowledge of financial reporting systems to perform their work. Theses accountants also utilize their knowledge of the legal system and use investigational techniques to build their case.
The basic requirement for becoming a forensic accountant is a 4-year business degree in accounting or finance. In addition to a degree, you will also need your CPA designation and good knowledge of law and the legal system. A master’s degree in business is the preferred education for those who want to work in forensic accounting, or a degree in law. In additions to keen accounting skills and legal knowledge, accountants in this field will need to be detail oriented and have good analytical skills. This profession is research heavy, and you will need to be a good communicator.
Forensic accountants can work for accounting firms and other businesses, or they can be independent consultants. Salaries can vary between those who are independently employed and those who work within large firms. Salaries range from 30,000-60,000 for those who are just starting out. Experienced forensic accountants can make from $125,000 to $150,000. The growth of this industry is expected to grow as cyber crimes and have increased and will continue to increase.