In an intricate global economy that relies more and more heavily on technology with every passing year, the demand for forensic accountants is expected to grow. But is it the right field for you? What sorts of tasks will you be responsible for performing, what education requirements will you need to complete, and what sort of job outlook or earning potential can you expect in the coming decade? This article answers all of these questions and more so that you can determine whether a forensic accounting degree program might be compatible with your interests, goals, and skills.
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 assist corporations, government entities, and other organizations with the increasingly complex — and increasingly critical — task of identifying fraud, embezzlement, and related financial crimes, along with providing critical investigative insight into civil issues such as breaches of contract or bankruptcy filings. Applying specialized skills like the collection of evidence and reconstruction of transactions, forensic accountants perform in-depth financial analyses, which serve as key evidence in civil and criminal legal proceedings, along with helping organizations identify and mitigate fraud risks.
As the U.S. Bureau of Labor Statistics (BLS) explains, “Many forensic accountants work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials.” But don’t think that means your days as a forensic accountant will be repetitive or routine. According to Peter Grupe, formerly special agent in charge of white-collar crime cases for the FBI’s New York office, “There really isn’t a typical day in forensic accounting. Some days you might be crunching numbers, some days, you might be conducting interviews, and on other days, you might be reviewing documents.”
Importance of Forensic Accountants in Today’s Business World
In today’s increasingly complex and interconnected business world, the importance of forensic accountants cannot be overstated. As financial transactions become more intricate and sophisticated, the need for skilled professionals to unravel financial mysteries and detect fraudulent activities has grown significantly. Here are some reasons why forensic accountants are essential in the modern business landscape:
- Combating Fraud: Fraudulent activities, such as embezzlement, asset misappropriation, and financial statement fraud, can cause significant financial losses to businesses, investors, and governments. Forensic accountants use their expertise to identify, investigate, and prevent fraud, helping organizations maintain financial integrity and protect their assets.
- Regulatory Compliance: As businesses face increasing scrutiny from regulatory bodies and growing compliance requirements, forensic accountants play a crucial role in ensuring that organizations adhere to financial regulations and standards. They help companies identify potential risks, develop internal controls, and maintain accurate financial records.
- Litigation Support: Forensic accountants are often called upon to assist in legal disputes and litigation, providing expert testimony, calculating damages, and conducting financial analyses. Their specialized knowledge helps attorneys build strong cases and navigate complex financial disputes.
- Mergers and Acquisitions: During mergers and acquisitions, forensic accountants can uncover hidden liabilities, assess the true value of target companies, and identify potential financial risks. Their expertise enables organizations to make informed decisions and avoid costly mistakes during these critical transactions.
- Enhancing Transparency: Forensic accountants contribute to the overall transparency and credibility of financial reporting by ensuring that businesses follow accounting standards and maintain accurate financial records. This, in turn, boosts investor confidence and promotes ethical business practices.
How To Become a Forensic Accountant
Whether they work with government agencies, business entities, or individual taxpayers, forensic accountants are expected to possess a high level of proficiency and are generally required to hold a bachelor’s degree or master’s degree in accounting or a related field, such as finance. While these types of programs generally require four years or longer to complete, National University offers a unique accelerated structure that enables students to graduate and pursue full-time careers sooner.
If your target goal is to become a certified fraud examiner (CFE) — an optional professional certification, similar to becoming a certified public accountant (CPA) — you will also need to earn your CFE credential, a four-stage process you can review here, and we will cover later. Otherwise, continue reading to learn the four step process you can follow to become a forensic accountant. Continue reading to learn more about graduate and undergraduate degree programs, professional organizations, the CFE exam, and career paths you may wish to consider.
Step 1: Training and Education
- Bachelor of Science Degree in Accounting — The Bachelor of Science in Accounting (BS Acc) at National University is a great way to start your journey toward a wide range of careers in and related to forensic accounting by teaching core skills and fundamental principles for accountancy. Though to be a forensic accountant, you will need to be on the CPA track, and a Master’s degree is needed. Coursework covers topics such as business and individual taxation, data analytics, auditing, ethics, and more — all of which can be completed 100% online for a flexible and convenient learning experience.
- Master of Science Degree in Accounting — Advance your studies and your career by pursuing a graduate degree in accounting, like the Master of Accounting at National University. With two unique pathways for students with and without undergraduate degrees in accounting, our accredited master’s degree in accountancy is ideal for learners from all types of academic and professional backgrounds.
- Courses in Criminal Justice — Along with a course in forensic accounting (ACC652M), which is part of the Master of Accounting (though not BS Acc) curriculum, National University also offers a variety of criminal justice courses, degree programs, and certificate programs which can support a graduate or undergraduate degree in accountancy. Examples of courses in criminal justice at National University that may be of interest to accounting students include digital evidence, network defense, and law for small businesses. Some of our criminal justice programs include the Master of Forensic Sciences, BS in Cybersecurity, and Certificate in Legal Studies. Students may also wish to major in accounting and minor in a field related to criminal justice.
Want to learn more about how to get into forensic accounting? Talk to one of our friendly and informative admissions counselors to receive detailed information about the programs offered by National University.
Step 2: Join Forensic Accounting Professional Organizations
- Association of Certified Fraud Examiners (ACFE) — The Association of Certified Fraud Examiners, whose slogan is “Together, Reducing Fraud Worldwide,” describes itself as “the world’s largest anti-fraud organization” and states its mission as “reducing fraud and corruption worldwide.” The ACFE is also notable for administering the ACFE exam and, for those who pass (and meet all other criteria), providing the CFE credential discussed above. Learn how to become a member of the ACFE or renew your ACFE membership.
- National Association of Forensic Accountants (NAFA) — The National Association of Forensic Accountants describes itself as “the oldest association of CPAs specializing in forensic/investigative accounting,” in addition to being “the fastest growing.” NAFA offers “intensive training in the methodology of Forensic Accounting Services…several times per year,” covering topics such as the role of the forensic accountant, forensic accounting services and methodology, and sample forensic accounting case histories. Learn about how to join NAFA and why to consider applying for membership.
Step 3: Become 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, work requirements, and preparation for taking the CFE exam.
Step 4: Forensic Accounting Career Paths and Applications
A degree in accounting opens up countless career paths, offering students opportunities to explore a diverse array of industries and specialties within the scope of forensic analysis. Here are just a few examples of the many forensics-related fields and career pathways a student can enter after obtaining a graduate or undergraduate degree in accounting in combination with obtaining (CFE) Certification :
- Tax Fraud
- Money Laundering
- Securities Fraud
- Hidden or Misappropriated Assets
- Family and Marital Disputes
- Insurance Claims
- Business Economic Losses and Bankrupt
- Identify Theft
Career Path and Opportunities in Forensic Accounting
Entry-level positions: Aspiring forensic accountants typically start their careers in entry-level roles, such as staff accountant, auditor, or financial analyst. Positions like this allow individuals to gain practical experience in accounting, auditing, and financial analysis while working under the supervision of experienced professionals.
Gaining experience: To transition into a forensic accounting role, professionals often seek opportunities to work on fraud investigations or compliance-related tasks within their organizations. This hands-on experience helps develop the specific skills and knowledge required for a successful career in forensic accounting.
Professional certifications: Obtaining relevant certifications, such as the Certified Fraud Examiner (CFE) or Certified Public Accountant (CPA) credentials, can significantly enhance career prospects in forensic accounting. These certifications demonstrate expertise and commitment to the profession, making candidates more attractive to potential employers.
Industries and Sectors Where Forensic Accountants Are in Demand
Public accounting firms: Forensic accountants are frequently employed by public accounting firms, providing fraud investigation, litigation support, and regulatory compliance services to clients across various industries.
Government agencies: Federal, state, and local agencies often hire forensic accountants to investigate financial crimes, ensure compliance with regulations, and provide expert testimony in legal proceedings.
Law enforcement: Law enforcement agencies, such as the Federal Bureau of Investigation (FBI) or local police departments, employ forensic accountants to assist in investigating financial crimes and white-collar offenses.
Financial institutions: Banks, insurance companies, and other financial institutions often require the expertise of forensic accountants to detect and prevent fraud, manage risk, and ensure regulatory compliance.
Corporations: Large corporations across various industries hire forensic accountants to strengthen internal controls, investigate potential fraud, and support litigation efforts.
Nonprofit organizations: Nonprofits and charitable organizations may engage forensic accountants to ensure proper financial management, maintain donor trust, and comply with legal and regulatory requirements.
Consulting firms: Some forensic accountants choose to work for specialized consulting firms or establish their practices, providing forensic accounting services to clients on a contractual basis.
Forensic Accounting Salary
The Bureau of Labor Statistics does not provide salary information specific to forensic accountants. However, Robert Half and the BLS report that accountants and auditors earned a median salary of over $77,000 per year, and a high-end salary of $144,750 a year, with a projected 7% change in employment from 2020 to 2030. Forensic accountants are in high demand, like other types of accountants 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.