Forensic Accounting
The growing number of cyber crimes, failure of regulators to track the security scams, successive busting of co-operative banks etc. lead to a rise in the need of Forensic accounting. Forensic accounting is the practice of utilizing accounting, auditing and investigative skills to assist in legal matters. Forensic accounting involves legal investigation and analysis of financial documents of any firm or client, who is involved in a legal dispute. It encompasses 3 main areas – litigation (law suit) support, investigation and dispute resolution. Litigation support represents the factual presentation of economic issues related to existing or pending litigation. In this capacity, the forensic accounting professional quantifies damages sustained by parties involved in legal disputes and can assist in resolving disputes, even before they reach the courtroom. If a dispute reaches the courtroom, the forensic accountant may testify as an expert witness. Investigation is the act of determining whether criminal matters such as employee theft, securities fraud (including falsification of financial statements), identity theft, and insurance fraud have occurred. Forensic accountant may recommend actions that can be taken to minimize future risk of loss. Investigation may also occur in civil matters. For example, the forensic accountant may search for hidden assets in divorce cases. This is a field wherein a professional estimates the damages and assists in settling various financial disputes before the cases step into the courtroom.
People who are professionals in this field are known as 'forensic accountants' or 'investigative accountants'. Forensic Accountant is a person who is one part accountant, one part detective and one part legal expert. Forensic accountants combine their knowledge of accounting and finance with law and investigative techniques to determine whether an activity is illegal. Many forensic accountants work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials. A forensic accountant is an experienced auditor, who acts as a watch-dog of accounts of a company, in order to keep a check on the frauds. These experts are responsible for using technology and implementing investigative techniques to disclose fraudulence and illegal practices in the fields of accounting, banking, financial laundering, etc. They carry out elaborated audits, verify records, gather proof of financial malpractice, and question people related to the misconduct.
The base layer of forensic accounting is Accounting knowledge. Other layer of it is a dispersed knowledge of auditing, internal controls, risk assessment and fraud detection. It’s more than simple accounting, and more than basic detective work. Because of its unique elements, it is a combination that will be in demand for as long as human nature exists. Those in a forensic accounting career combine their accounting, auditing and investigative skills to analyze and interpret business and financial evidence, and can participate in trials as expert witnesses. Working on anything from bankruptcy and divorce cases to major fraud and capital crime cases it is the forensic accountant who is involved in all the squad.
Eligibility & Course Areas
Educational: Most forensic accountants have a bachelor’s degree in accounting, and many have additional academic preparation in fields like criminal justice or law enforcement. After bachelors degree in accounting one can go for diploma or certificate course in Forensic accounting. As part of Law in some institutes forensic accounting is also taught as a separate paper. To work as a forensic accountant abroad, you'll need to earn a bachelors degree in accounting and CPA certification to begin a forensic accounting career. It is also advantageous to become a CFE (Certified Fraud Examiner) or a CrFA (Certified Forensic Accountant).
Course in forensic accounting covers areas like Financial Accounting and Financial Frauds, Criminology & Ethics, Forensic Accounting and Fraud Investigation, Legal Framework for Forensic Accounting etc.
Personnel Attributes:
The job of a forensic accountant is quiet challenging. It requires commitment, loyalty, and devotion. Understanding of psychological theories, analytical/investigative skills is a must for the person. Forensic accounting requires the most important quality a person has to possess: the ability to think. His/her conclusion should not be based on any assumption or opinion. Proper research work and detailed study of accounts is required to draw a fair and unbiased conclusion. Forensic accountants need to possess sound knowledge in financial procedures and have investigative skills. They must have the skills of both a private investigator and an accountant. Hence he/she requires an exquisite eye for detail, a solid background in both accounting basics and legal concepts, and a love of the excitement that comes with law as well as order. Forensic accountants must have remarkable curiosity, attention to detail, persistence, and the ability to think creatively and communicate effectively. Many accountants may have to work with a team who have different backgrounds, so they must be able to communicate clearly and concisely.
Job Prospects & Career Options
In India, in the wake of the Satyam scam, demand for forensic accountants have gone up. There is an increase in the rate of white collar crimes, such as securities fraud and banking and investments embezzlement. As a result, the demand for professionals, who are experts in financial procedures and have strong analytical as well as investigative skills, is on the rise. Those who have completed a forensic accounting program will work anywhere investigative accounting is needed. Forensic Accounting firms are everywhere and will exist as long as human beings exist. Forensic Accountants work in most major accounting firms and are needed for investigating mergers and acquisitions, and in tax investigations, economic crime investigations, all kinds of civil litigation support, specialized audits, and even in terrorist investigations. A majority of cases which these professionals deal in are divorce disputes, business carelessness investigation claims, and personal injury claims.
Forensic Accountants work throughout the business world, ranging from private corporations or firms that help specific companies deal with suspected (or known) fraud and embezzlement to government organizations like police departments, the CBI (Central Bureau of Investigation), FBI or the CIA (Central Intelligence Agency), the Internal Revenue Service, and the Bureau of Alcohol, Tobacco and Firearms. Forensic accountants also frequently work for public accounting firms, banks, the IRS (Indian Revenue Service), insurance companies and law firms.
Law firms often use forensic accountants to help divorcees uncover their hidden assets. In public accounting firms forensic accountants investigate and interpret crimes such as securities fraud and embezzlement, bankruptcies and contract disputes, and other complex and possibly criminal financial transactions, including money laundering by organized criminals. Corporations hire forensic accountants to investigate allegations of fraud on the part of their employees, suppliers, or customers. In criminal investigations, forensic accountants analyze complex financial transactions such as those in stock market manipulations and price fixing schemes. They also help governments achieve compliance with various forms of regulation. The job of a forensic accountant demands reporting, where the accountability of the fraud is established and the report is considered as evidence in the court of law or in the administrative proceeding. Forensic accountants help uncover those companies cooking the books to falsely inflate company profits, minimize losses or divert large amounts of money to company leaders. They also provide litigation support to attorneys and law enforcement agencies investigating financial wrongdoing.
Institutes
In the current scenario, career in forensic accounting has emerged as a lucrative option in India. Keeping in view of the increasing demand for forensic accountants, many institutes in India are offering courses to build a career in the same. The Institute of Chartered Accountants of India and The Institute of Chartered Financial Analysts of India offers courses in this field.
Click on the following link for the details of Indian Institutes :
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