What Is Forensic Accounting?

Forensic accounting is the bean counter equivalent of CSI investigators. Learn what they do and how to become one here.

Forensic accounting is the bean counter equivalent of CSI investigators, with the notable exception that this field involves considerably less risk of being shot at and virtually no interaction with deceased people. Instead, the focus is on detecting and exposing complex financial frauds.

These are the folks who are called upon when an Enron-sized company implodes. Billions of dollars that should have been there; aren't. Suddenly, nobody knows anything about anything, so it's up to the forensic accountants to search the truckloads of files and records until they find out exactly how things played out.

This is hard, tedious work that demands an incredible eye for detail. Today's multinational corporations can have hundreds of operations running all over the globe with cluster upon cluster of subsidiaries, partnerships and joint ventures. The forensic accountant has to map it all out and methodically examine the paper trails until they have everything figured out.

Armed with the facts they can then provide a prosecutor with evidence against the crooks, clear the innocent bystanders and hopefully but far from certainly track and retrieve funds that have gone astray.

Ironically, these white-collar crimes often involve amounts hundred or thousand times that of robberies and burglaries, yet the stodgy image of accounting in general keeps the profession relatively obscure. Don't hold your breath waiting for "CSI: Wall Street" to go on the air.

Like lawyers, doctors and other professionals, forensic accountants often choose to develop niche skills once they have racked up a few years of general experience. By becoming THE authority in a complex industry, a type of foreign investments, specific countries etc. the accountant can gain much deeper skills (and command much better pay).

To become a forensic accountant you need at least a BA in accounting, but those who pursue this career tend to go for either a Cr.FA (Certified Forensic Accountant) or a CFE (Certified Fraud Examiner). Another route is to get a regular CPA and add on at least an AA in criminal justice, law enforcement or similar.

Whichever certification you choose, you'll have to endure some very challenging exams as well as 2 years or more as the low person on the totem pole at a firm or law-enforcement agency until you've wrapped up your formal certification. That means a lot of bad coffee, late nights and thankless number crunching.

The good news is that the pay is fairly decent. Entry-level forensic accountants typically make $40,000-$50,000 per year right off the bat, and the rate rises steeply with experience. Forensic accountants at private firms can easily make $150,000 or more.

As for upward mobility, private accounting firms, banks, law firms and insurance companies typically offer more opportunities. On the other hand, police agencies, IRS and FBI or CIA typically offer more job security.

The job prospects are excellent; U.S. News & World Report named this field one of the "20 hot job tracks of the future." As long as there are corrupt corporations, crime syndicates and terrorists bouncing money around on a global scale, there won't be any demand shortage for forensic accountants.

Trending Now

© High Speed Ventures 2011