If you enjoy crunching numbers, but also like solving the mysteries behind fraudulent transactions or dirty financial dealings, becoming a forensic accountant might be the right career path for you.
In recent years, this specialization gained notoriety thanks to forensic accounting and financial fraud investigator Harry Markopolos. It was Markopolos that discovered Bernie Madoff’s wealth management endeavor was actually one of the largest Ponzi schemes in U.S. history.
Forensic accountants have also worked with the federal government using their expertise to flag transactions that have led to bringing white collar criminals — and even drug lords — to justice.
Learn more about this fascinating career path and how to become a forensic accountant.
What Is a Forensic Accountant?
A forensic accountant uses accounting and analytical skills to investigate financial transactions of a person or business. They are often relied upon as experts in legal cases that deal with financial fraud or embezzlement. Due to their training that combines accounting alongside the ability to see the story numbers may tell, they are able to use their skills to uncover what those numbers are trying to hide.
What Do Forensic Accountants Do?
Forensic accountants have a number of duties. They can work in either a civil or criminal capacity to uncover evidence of fraud based on transactions. In addition to looking at financial statements, some forensic accountants also help connect the dots by looking at public information (such as Facebook or Instagram photos of a person at a specific location or with an extravagant purchase) that may back up the numbers that don’t add up.
One of the most high profile aspects of forensic accounting as a career is the work these professionals do in criminal cases. They use their skills to read financial statements and even look into personal activity that could tip off instances of money laundering, false tax returns, or embezzlement. If a person is involved in illegal or criminal activities, such as selling drugs or other illicit behaviors, forensic accountants track patterns and look to see why a person’s income may have increased dramatically within a short span of time, as well as how and why they’re dividing it among different bank accounts.
In terms of civil cases, forensic accountants may work with lawyers to lend their expertise to uncover or support evidence in personal and/or corporate matters. They may be called upon in cases such as car accidents or medical malpractice disputes where a party may need to assign an exact number to damages to determine compensation. They can also be brought in to assist with divorce settlements, bankruptcy proceedings, or disputes surrounding corporate acquisitions. In these types of cases, they use their skills to search for hidden assets or for breaches of contract.
Where Do Forensic Accountants Work?
Forensic accountants can work within more traditional financial sector businesses, such as public accounting firms, insurance companies, or banks. Due to their unique skill set, forensic accountants can also be called upon to testify in court as expert witnesses in cases of fraud or embezzlement. However, they can also work with law enforcement, working alongside the police or government agencies. In some instances, forensic accountants are employed directly by the Federal Bureau of Investigation (FBI).
Forensic Accounting Careers: What is a Certified Fraud Examiner?
Much like more general accounting fields have a designation for certified public accountants (CPAs), forensic accountants also have their own distinction. This distinction is known as a certified fraud examiner (CFE). The CFE accounting field also has its own professional organization, the Association of Certified Fraud Examiners, which offers career advice and preparation for the CFE exam.
Forensic Accounting Qualifications & Requirements
In order to become a forensic accountant, you’ll need to earn a bachelor’s or master’s degree in an accredited accounting or financial degree program, or a forensic accounting degree program. No formal licensing is required to become a forensic accountant.
However, in order to become a CFE, not only will you need to earn at least a bachelor’s degree in accounting or finance, you’ll also need to pass a test that demonstrates your proficiency in four key areas. To earn the CFE designation, you’ll be tested to show your expertise in areas such as:
- Fraud prevention and deterrence
- Financial transactions and fraud schemes
- Investigation techniques.
Many forensic accountants also consider earning a CPA designation, which requires holding a state license. While it’s not required to become a CPA in order to become a forensic accountant or CFE, this additional distinction helps you increase your earning potential and stand out among your peers.
In order to earn a CPA designation, you’ll need to earn a total of 150 credits from an accredited college or university, as well as pass the CPA exam offered by the American Institute of CPAs (AICPA). To give you an idea of the amount of educational investment it takes to become a CPA, it typically takes 120 credits to complete a bachelor’s degree, while a master’s degree often requires an additional 36-54 credits to complete.
Forensic Accounting Salary
The average national salary for forensic accounting is approximately $62,000 per year, although forensic accountants can command up to as much as $91,500 annually later in their career. Forensic accountants who are employed by the FBI are reported to earn approximately $77,217 per year. Like other types of accountants, forensic accountants are in high demand throughout the country.
According to the Bureau of Labor Statistics, it’s anticipated that accounting occupations will see approximately 6% of new job growth. The government agency also notes that the employment rate of accountants and auditors is directly tied to the growth of the economy, requiring more professionals with the ability to examine and review financial records.
Becoming a Forensic Accountant
In order to become a forensic accountant, you’ll first need to earn either a bachelor’s or master’s degree in accounting or finance. While some schools offer a formal forensic accounting degree, students can also customize their course load, majoring in accounting or finance, while rounding out their education with courses in criminal justice.
Although no specific licensing is required to become a forensic accountant, you may also plan to take the CFE exam to earn the CFE credential designation. While this is not a necessary requirement to becoming a forensic accountant, it does help individuals stand out, having demonstrated a high degree of expertise in this niche area. A CFE designation can earn you approximately 30% more salary than those without the certification. Certified forensic accountants are also expected to periodically take continuing education courses to keep their credentials.
If you’re thinking of becoming a forensic accountant, National University’s College of Professional Studies can help you earn your bachelor’s or master’s degree in an accredited accounting or financial program, as well as give you options for additional certification within the criminal justice field. Contact our admissions team to learn more about the programs we offer and how they can help you get started in a rewarding career path.