Forensic accounting is a practice whereby investigative skills, accounting and auditing are used for legal matters. A forensic accountant resolves disputes between parties, investigates matters and may testify in the court. As the name suggests, an accounting preview is done and presented to the courts and used for dispute resolution.
Forensic accounting involves two aspects, litigation assistance and investigative accounting. Forensic accountants use their accounting and auditing knowledge in any investigation. They must be articulate in communicating and interpreting financial data. The information must be presented in a concise and clear language that is understood bythe court or the jury. It is not all about financial investigation and analysis, a forensic account is expected to handle the business nature of the matter.
Forensic accounting is offered in many colleges and universities in the United States of America. It is one of the fastest growing specializations in the accounting field. The career is exciting, challenging and valuable to society. The pay is very handsome, and its demand is always rising. It is a secure career that one may take, and the earning potential is around $120,000 per month.
The forensic accounting profession might have been inspired by the movie "Sherlock Holmes". The first Sherlock Holmes actor was an accountant.
Forensic accounting has two branches, litigation assistance and investigation. Litigation assistance or support is the process of finding facts about financial matters related to litigation. The forensic accountant assesses the extent of damages and calculates the costs. The damages are quantified for the purpose of out-of-court settlements between the disputing parties. If the parties do not agree to settlements, the matter will go tothe court, and the forensic accountant will be called to testify.
The second branch of forensic accounting is investigation. Investigation involves finding out the facts or truths about criminal accusations. In this case, the forensic accountant will find out if theft or fraud has occurred in a case involving the disputing parties. Theft comes in many forms such as stock trading theft, forex theft, employer theft, employee theft, insurance fraud, identity theft, tax fraud, sales theft, customs theft and so on. Theforensic accountant will analyze the financial records and come up with solutions to prevent theft from happening again. Fraud investigation often involves companies and large corporations. The forensic accountant is also involved in investigating fraud in government and federal departments. Allegations of corruption are popular in many organizations and this calls for the intervention of aforensic accountant, who may be independent or employed by the state.
The most important quality or trait in forensic accounting is the ability to analyse and think. An experienced forensic accountant has a highly developed capacity to think that is cultivated progressively as he works with complicated matters. This element is a key to success and it makes you one of the most sought after forensic experts. You may have good degrees in this particular field, but knowledge alone is not enough, your investigative skills should be sharp.
If you think forensic accounting is your thing, you must begin your career. Search for the right insititution. You can begin a degree in forensic accounting and advance as far as the Master's degree. Students wishing to pursue a career in forensic accounting are advised to obtain a CPA for a start. The advantage of starting out with a CPA is that it gives the student a broad view beyond the normal accountant-client relationship. CPAs emphasize social obligations that are not contained in pure accounting.