How to break into forensic accounting
Forensics aren’t limited to the world of police and TV crime shows. From big financial scandals, like Bernie Madoff’s multibillion-dollar Ponzi scheme, to identity theft to embezzlement, the field of forensic accounting offers plenty of opportunities to detect fraud and help protect the public.
“Forensic accounting is performing an accounting service that [may] be used in litigation, which can be criminal or civil in nature,” explains Robert Minniti, CPA, a forensic accountant who teaches online courses in the accountancy program for University of Phoenix.
Forensic accountants work for corporations, accounting firms and law enforcement agencies to investigate fraud and embezzlement, explains Karen Boulay, CPA, an online instructor in the MBA program for the University. They also provide details about hidden income or assets in divorce or bankruptcy proceedings, and can do independent company valuations for interested buyers.
“When we are performing a forensic [accounting service], we typically go in with a specific hypothesis regarding fraud and [do the work] around that hypothesis,” Boulay explains. Many senior-level forensic accountants are self-employed consultants, Minniti adds.
Here are four ways to get into the field:
Earn an accounting degree.
A bachelor’s degree in accounting is the first step, Minniti says, which may qualify you for entry-level forensic accounting work with some employers.
“Many law enforcement agencies, like the FBI, IRS, SEC [Securities and Exchange Commission], and Department of Homeland Security, hire people right out of college to do staff support in forensic accounting,” he says, noting that insurance companies often do likewise. If you’re interested in the field, Minniti recommends that you take some elective criminal justice courses.
Gain related experience.
“There are two kinds of forensic accounting: consulting and testifying,” Minniti explains. “Consulting is done outside the courtroom.” That’s where the entry-level forensic accountant can gain experience.
“You do the ground-level paperwork, learn the terminology and eventually you [may] work your way up to the testifying level [in the courtroom],” which requires a lot more education and training, he says.
Become a CPA and get a master’s degree.
Most forensic accountants who testify also are certified public accountants (CPAs), because in most states, only CPAs can publicly audit financial statements, according to Boulay. “The documents must be professional, reliable and able to stand up to scrutiny at trial,” she adds.
A master’s degree in accounting can be necessary if you want to testify in open court. “In order [for you] to give expert testimony, the presiding judge has to accept you as a qualified expert. The more letters you have after your name, the better,” Minniti says.
Graduate degrees also can increase your credibility with juries, according to Minniti, who notes that many forensic accounting principles are only taught at the graduate level.
Pursue additional certifications.
Forensic accountants who want to testify in court on a wide variety of cases may find that advanced certifications and licensing are required, Minniti stresses.
“You may need to get licensed as a private investigator [PI] before doing any type of public surveillance,” like following someone you suspect of stealing company assets off-site to see where they take the items, Minniti says, noting that most courts only admit into evidence surveillance gathered by PIs. Private investigator licensing requirements can vary greatly by state, so check the regulations where you live.
Other certifications that may be relevant include Certified Fraud Examiner (CFE), Certified in Financial Forensics (CFF) and Certified Forensic Accountant (Cr.FA). Having these may lend credibility in court and keeps you up to date on the latest forensic accounting methods, Boulay says, adding, “People who commit fraud and embezzlement are becoming more savvy as technological changes occur.”