The word “Forensic” means legal and exploratory. It may surprise you by affixing the word “Accounting” next to Forensic. Forensic Accounting focuses on fraud investigation by studying companies’ accounting practices and histories, thus identifying fraudulent works and financial irregularities, if any. So to put simple, Forensic Accountancy integrates accounting, auditing and investigative skills together. Forensic Accounting is the fastest growing sector in accounting today and there is a big demand for Forensic Accountants.
What does a Forensic Accountant do?
Forensic Accountants use their investigative accounting techniques in complex business and financial related issues, to provide an accounting analysis that will form the key evidence during criminal litigation and dispute resolution. Take for example, a well-known firm gets involved in a financial scandal and this issue is reported to court, a forensic accountant will be investigating all the firm’s records to find what the reason for the current financial situation is. The records they use in investigation are called as ‘financial evidences’. They then write a report of their findings and produce it before courtroom. They also assist the court proceedings, by giving an expert testimony. Money laundering, concealment of assets, floating illegal money etc. are some of the criminal activities uncovered by forensic accountants.
Benefits of Forensic Accountancy
One of the major advantages of Forensic Accounting is Fraud Prevention, where the frenkels is the best in. Fraudulent activities, not only damages a company’s assets but also its reputation among customers thereby affecting their business opportunities. So the best solution is to employ an expert forensic accountant who can help their businesses by minimizing frauds and to avoid lawsuits. Forensic accountants can identify the key problem areas by scanning the financial documents and transactions, finally providing recommendations on how to stop the fraudulent activities from occurring and improvements for the financial situation. They also save the company from wasteful spending by highlighting the areas where money is not spent wisely, in their reports. Forensic accounting helps in the investigation of terrorists and criminals who are involved in financial wrongdoing. There are cases where forensic accountants helped the FBI in identifying the criminals who stole money from ATMs.
Career in Forensic Accounting
Forensic Accountancy can be fascinating and lucrative career. Thank to more exacting auditing regulations put in place and an expanding economy, this field is growing, providing plenty of opportunities like frenkels. Forensic accountants are mostly well paid, provided their years in the profession and the size of the firm employing, The various courses provided in Forensic Accounting includes law enforcement, business law, criminal law, finance, psychology, information systems etc. The growth in forensic accountancy is wide spread across many businesses, thus increasing forensic accountants’ demand. Forensic accountants are generally employed with law enforcement, accounting firms, government agencies (CIA, IRS, FBI, etc.), private practice, banking, insurance companies, nonprofit sector etc.
Forensic accounting is beneficial to the society by producing the criminals, who try to steal money before justice. So to be a financial accountant, one has to be creative, confident, curious, discrete and persistent. Since they work throughout the business world, effectual listening and sound communication skills are must.
written by: Arunkumar Jayaraman