How To Become A Forensic Accountant: Steps To Become A Forensic Accountant 2020 Guide
Forensic accounting is one the fast growing fields in Criminal Justice landscape. Forensic accountants inspect the business and tax records for investigation of any irregularity that can have an impact on the civil and criminal cases. They may work with the FBI (Federal Bureau of Investigation), the United States Secret Service or behalf of any large corporation or public accounting firm.
If you desire to pursue a career in forensic accounting, please read our Complete List Of Steps To Become A Forensic Accountant
WHAT IS FORENSIC ACCOUNTING?
The Association of Certified Fraud Examiners defines forensic accounting as a combination of accounting knowledge and investigative skills that help in dealing with criminal and fraud cases. Forensic, itself, means suitable for use in the court, so as forensic accountant, you will be required to follow the money trails and testify in court regarding your findings in the investigation.
Interested In Becoming A Forensic Accountant? Do You Know How Much A Forensic Account Make?
Please Read Our Guide For Steps To Become A Forensic Accountant:
WHAT DO FORENSIC ACCOUNTANTS DO?
The job of a forensic accountant is a combination of an accountant, an auditor and an investigator. They can assess the accounts presentations and systems to determine whether any process is legally correct or not. They can be used to calculate and quantity the financial damage and loss to determine the negligence or criminal activity involved (if any).
In short, it can be said that forensic accounting covers two major areas:
This deals with the factual presentation of the economic issues, associated with the pending or existing litigation. A forensic accountant calculates the damage sustained by parties involved in legal disputes and help in resolving those disputes before it reaches the courtroom.
In the court room, a forensic accountant testifies as an expert witness. Knowledge of courtroom makes a forensic accountant unique from a typical accountant. He must not only be able to collect the evidence, but also present it in a brief and concise way in front of the jury members and the judge.
Investigations in criminal matters like insurance fraud, security fraud, employee theft etc. are done by a forensic accountant, he may also be hired for investigations of civil cases for example search of hidden assets in divorce cases etc. These professionals have a vast knowledge to cover all aspects of an investigation. They are required to write report, assist in civil and criminal investigation, and conduct fraud investigations and testifying in the court.
EDUCATION AND DEGREE REQUIRED:
If you are planning to pursue a career in forensic accounting, you need to have a Bachelor’s degree and preferably a Master’s degree so that you can qualify for a good position in this field. You should plan your education, keeping in mind forensic accounting as your end goal. Find a school that is accredited, and then look for the CPA requirements of the country. Internships, encompassing forensic, can be really beneficial for you. Once you get your degree, and pass the CPA exam, you should focus on gaining required experience as forensic accountant while qualifying for the CPA license.
EARN YOUR CPA:
To be a forensic accountant, it is important to become a CPA first. Although it is not always required to be a CPA for becoming a forensic accountant, it is preferable that you make it as your first educational goal.
It is recommended by the American Institute of Certified Public Accountants that the forensic accountants must complete a 12 module course, named The Fundamentals of Forensic Accounting, in order to progress in this field. It is recommended to take as many forensic courses during your degree as possible.
A few sample courses that fall in this category are listed below:
- Understanding the Basic Structure of Legal system
- Identifying and Obtaining Evidence
- Managing the forensic engagement
- Family Law engagement
- Valuations in Litigation Matters
- Fraud prevention, detection and response
- Common Investigative techniques
- Investigating with computers
- Interview Techniques/Legal Aspects fraud
- Managing the Forensic Engagement
- Conducting Effective Interviews
CERTIFICATES, CREDENTIALS AND EXPERIANCE REQUIRED:
Along with qualifying for CPA license, you should also plan for Certified Fraud Examiner, Certified in Financial Forensics, or both.
These certifications are very beneficial for your career in forensic accounting. With the bachelors in forensic accounting and CPA license, you need to have two years’ experience in a specific area that deals with fraud cases. This is where CPA experience and internship is helpful to save your time on the path for becoming forensic accountant. Experiences in the following areas is accepted:
Criminology and Sociology:
Research and education in the dimensions of sociology and criminology can be beneficial in the field of forensic accounting.
Auditing and accounting:
Experience is gained with responsibilities required for detection of fraud in certain specific fields.
Experience and learning during the investigation of criminal and civil fraud cases, or white collar crime for various law enforcement agencies or in private corporations is beneficial for career as forensic accountant.
Experiences in the issues regarding loss prevention, as security consultants to deal with fraud related issues is also preferred for Forensic accounting.
If the candidates have experience in legal issues related to fraud cases, they can use this as well.
Steps To Become A Forensic Accountant
You’ll find varied avenues to become a forensic accountant, but the majority have at least a bachelor’s degree in accounting, economics, finance, business, or a business or finance related subject.
One possible way to become a Forensic Accountant:
Step 1: Obtain A High School Diploma
Any successful forensic accountants path starts with graduating from high school. Aspiring accountants are expected to excel in mathematics, computer science, statistics, and psychology classes. At this point, a few students might decide to intern or volunteer in forensics, bookkeeping, banking, computers, or other applicable fields in order to better their school programs, to build a reputation through valid references in the forensic accounting field.
Step 2: Attain A Bachelor’s Degree In Forensic Accounting Or A Relevant Field (4 years)
To become a Forensic Accountant you need a bachelor’s degree.
Application conditions for post-secondary universities typically involve
- Delivering official transcripts.
- Having a high GPA e.g. >3.0
- Finishing special classes (e.g., Statistics, calculus and computer science)
- Creating a personal statement
- Submitting official test scores
- Submitting Application with Fee
The Course Work Varies by the Graduate Programmer’s Specification. But normally includes guidance in Financial Accounting, Auditing, Cost Management, Managerial Accounting, Asset Misappropriation Scams, quantitative methods of Analysis and other basic coursework. There is an abundance of choices to consider. A few schools, for example, John Jay College of Criminal Justice in New York City offer Fraud examination as a minor.
Step 3: Take the Uniform Certified Public Accountant (CPA) Examination
To Become A forensic accountant students must pass the cpa examination held by the National Association of State Boards of Accountancy (NASBA). The test is made up of four sections which are
- Auditing & Attestation
- Business Environment & Concepts,
- Financial Accounting & Reporting
- Financial Regulations
The Pass score is 75 marks Out Of A Total Of 99 marks
Step 4: 1-3 Years Of Professional Experience
Before you earn your CPA license you need to have 1-3 years of professional experience especially in forensic accounting, internal auditing, fraud detection, white-collar crime investigations.
Step 5: Get Your CPA Licence
The requirements to gain your CPA licence may vary state by state. The American Institute of Certified Public Accountants(AICPA) provides a table of state to state requirements to become a licensed CPA. Like California Board of Accountancy requires 1 year of professional experience.
There is a wide scope of extra certification relevant to Forensic Accountant some are more respectable than others.
- Federal Bureau of Investigation (FBI), only accepts the following certifications among its applicants in forensic accounting:
- Certified public accounting (CPA),
- Certified financial forensics (CFF-AICPA)
- Certified fraud examiner (CFE)
- Certified internal auditor (CIA)
- American Institute of Certified Public Accountants (AICPA) provides the certified in financial forensics (CFF) certificate
- Association of Certified Fraud Examiners (ACFE) provides certified fraud examiner (CFE) certification.
- Institute of Internal Auditors (IAI) provides the certified internal auditor (CIA) certification.
BECOME A CERTIFIED FRAUD EXAMINER (CFF):
The candidates having CFF Credentials are granted to be qualified CPA by AICPA. To be eligible for CFF exam, you need to meet the following requirements:
Education: It is obligatory to have 75 hours of forensic accounting counting professional development (CPD) within the 5 year period from the date of CFF application.
Experience: The candidates applying for CFF must have at least 1000 hours forensic accounting experience within the 5 year period from the date of CFF application.
Although it is not obligatory for a forensic accountant to have any of these credentials, you should plan to have at least one. You should look at the specific experience preferred by the employer and work on it.
How To Become A Forensic Accountant For The FBI
FBI SELECTION CRITERIA:
The FBI prefers those candidates who have a Bachelor’s or a Master’s degree, a CPA license, and hold a certificate from CFF or CFE, along with experience in any of the following fields:
- Forensic accounting
- Government auditing
- Public accounting
- Financial services industry
- Corporate accounting
- Internal auditing
- Litigation Support and dispute services
Many states also require CPE i.e. Continued Professional Education, once you hold a CPA license, so you should plan according so that it can provide you with the maximum benefit in your career.
CAREER FOR A FORENSIC ACCOUNTANT:
There are various fields in which a forensic accountant can be employed. Here is a list of each specific field, along with the duties assigned to a forensic accountant:
Responsibilities and duties:
In a law firm, a forensic accountant has to perform the following duties:
- They have to work as a consultant for financial issues.
- They have to translate financial findings to be easily understandable for the jury members and the judge
- They have to provide assistance in finding financial experts to use as witness
- They have to conduct audits for investigations
Education and Experience required:
- Fraud Examiner Certificate
- 5-10 years of experience preferably in litigations and investigative audits
GOVERNMENT DEPARTMENTS (CIA, FBI, IRS):
Responsibilities and Duties:
A forensic accountant has to perform the following duties in the governmental departments:
- They have to investigate the financial histories of criminals, spies and terrorists
- They have to build financial records for suspicious persons
- They have to gather evidence and provide assistance in execution of warrants
- They have to take part in interrogations
- They have to compile the investigation reports
- They have to attend meetings with prosecutors to discuss the strategy.
Education and Experience:
For entry level:
- They must have a bachelor’s degree in accounting with minimum 24 hours in accounting course
- They must have 1 year experience in relevant field
- Candidates with Fraud Examiner certification and CPA certification are preferred
- An experience of at least one year at GS-12 level is required
- Expert knowledge in legal proceedings, digital accounting software and production of reports is required.
Responsibilities and duties:
- They have to conduct fact finding interviews
- They have to translate financial findings in easy language
- They have to collect evidences in fraud cases
- They have to calculate financial losses
Education and Experience:
- For entry level, Bachelor’s degree in accounting is required with 1 year of forensic accounting experience and 3 years audit experience. For mid-level, 3-5 experience in investigative auditing is preferred.
- CFE AND CPA certifications are also preferred.
CORPORATE SECURITY AND RISK MANAGEMENT FIRMS:
Responsibilities and duties:
- They have to ensure protection for financial assets
- They have to analyze the changes in tax, exchange rates, and laws and their impact on the operations
- They have to perform auditing, and ensure the compliance of financial matters with the rules and procedures
Education and experience:
- Minimum bachelor’s degree in accounting is required
- CFE, CPA AND CFF certification is preferred
- Experience according to the post is necessary.
FINANCIAL CONSULTING FIRMS:
Responsibilities and duties:
- They have to perform investigation of the fraud and corruption cases
- They have to analyze and maintain financial records
- They have to conduct interview, and assess the vulnerability to fraud
Education and experience:
- For entry level, 0-2 year experience and for mid-level, 3-5 years’ experience is required.
- For mid-level, Master’s Degree is preferred
- CPA, CFF AND CFE certification is also preferred.
FORENSIC ACCOUNTING SALARY EXPECTATIONS:
The statistics show that forensic accounting professional earn $45000 to $113,026 per annum. The average salary in this profession is $63,645.
According to the Bureau of Labor Statistics, entry-level forensic accountants make an average of $60,000. With the gain of experience and knowledge, this number can be increased up to $79,000. The forensic accountants with experience greater than twenty years can even make up to $100,000 per annum.
START YOUR JOURNEY AS A FORENSIC ACCOUNTANT TODAY:
Choose the right program for yourself, get experience and knowledge in the relevant field, and start your progress towards your career as a forensic accountant. Good Luck!
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