Pros and Cons of a Career as a Forensic Accountant
Forensic accountants investigate corporate fraud and other criminal activities in the financial world. If you wish to have an impact on white-collar crime, there are a few things you may want to consider.
| Pros of a Career in Forensic Accounting |
|---|
| Certified professionals have strong job prospects* |
| Potential for above-average income (Around $116,000 on high end of salary range)**** |
| Opportunity to prevent continued cost of accounting fraud (2009 estimated global loss was $2.9 trillion)** |
| Ability to pursue specialized or advanced degree in forensic accounting |
| Cons of a Career in Forensic Accounting |
|---|
| Increasing competition for employment (2009 estimates: 3,500 accountants were Certified in Financial Forensics)*** |
| Requires unique skill set beyond typical accounting skills*** |
| Continuing education required to maintain credentials*** |
| Extensive work experience is required to become certified in this field*** |
Sources: *U.S. Bureau of Labor Statistics, **Association of Certified Fraud Examiners, ***American Institute of Certified Public Accountants (AICPA), ****Payscale.com.
Career Information
Job Description
The public outcry over well-publicized corporate improprieties in recent years has provided increased recognition for this profession. The U.S. Department of Justice reported that as early as 2005, 67% of surveyed businesses encountered at least one instance of cyber crime. Forensic accountants investigate securities crimes and embezzlement for local, state and federal law enforcement agencies. These professionals are employed throughout the country, either to protect the interests of private firms, provide consulting services or assist in criminal investigations. They can also work for public accounting firms and corporations. Forensic accountants investigate financial records in contract disputes and civil litigation. Careers in forensic accounting blend finance with the law, and these professionals often testify in court, analyze financial statements and investigate employee theft.
Job Outlook and Salary Info
While the U.S. Bureau of Labor Statistics (BLS) reported a mean salary of about $74,000 for all accountants and auditors in May 2014, Payscale.com reported that most forensic accountants earned between $42,000 and $116,000 as of July 2015. General accounting and auditing professionals can expect average employment growth of 13% from 2012-2022, according to the BLS. Professionals that possess advanced degrees in accounting may find increased employment opportunities. However, it is possible that you will face strong competition for forensic accounting jobs. According to the most recent data available from the AICPA, 3,500 professional certifications were issued in 2009 to eligible candidates, which far exceeded their expectations.
Requirements
Education and Certification Requirements
According to an AICPA survey, to work as a forensic accountant, you will most likely need to become a Certified Public Accountant (CPA). To earn this credential, you can acquire a bachelor's degree in accounting with an emphasis in forensic accounting and pursue additional coursework toward a graduate certificate or a master's degree, since you'll need to earn a minimum of 150 hours of college credit to take the CPA exam.
Programs in forensic accounting feature coursework on topics such as corporate tax fraud, business valuation and litigation consulting. Your program may also cover fraud investigation, financial evidence collecting, data analysis, cyber-crime security and prevention, digital investigation, financial ethics and forensic accounting interview techniques.
Useful Skills
The AICPA conducted a survey to establish traits and aptitudes common for forensic accountants. You will need to possess analytical skills, be detail-oriented and employ a tremendous sense of ethics in your work. In addition, as a forensic accountant, you will utilize excellent oral and written communication skills because you will often be asked to interpret complex evidence for a broad audience. The AICPA survey reported that forensic accountants also needed knowledge of evidence rules and law enforcement methods.
Real Job Listings
Employers of forensic accountants look for applicants with experience in public accounting or forensic accounting. They generally ask for a bachelor's degree in accounting and a CPA license. Most employers want a professional with strong communication skills who can work as part of a team. Here are a few examples of job postings from April 2012:
- A New York City public accounting firm seeks a litigation and forensic accounting services professional. While a bachelor's degree is required, the firm prefers an advanced degree. Ten years of professional experience is also required.
- A New Jersey accounting firm wants a forensic and litigation accountant with strong communication skills and 4-9 years of experience. The applicant should be a CPA or a CPA candidate.
- A Florida government agency seeks a forensic accountant to plan and coordinate liquidation or rehabilitation for non-licensed or insolvent insurance companies. Three years of experience is required plus a 4-year degree. A CPA license may substitute for one year of experience.
- A federal agency is looking for a forensic accountant. Qualified applicants will be tested on a variety of competencies, including financial statement analysis and technological applications as well as written and oral communication.
How to Stand Out
Pursue Certification
The AICPA survey indicated that certification in this field, while not required, was an important qualification for forensic accountants. The AICPA offers the Certified in Financial Forensics (CFF) credential to interested applicants. In order to become eligible for the CFF, you must be a CPA in good standing with five years of professional experience. You must maintain your credentials through appropriate continuing professional education courses and successfully complete the CFF examination covering the following areas of specialized forensic knowledge:
- Financial statement analysis
- Economic damages calculation
- Fraud prevention
- Valuation
- Bankruptcy and corporate reorganization
- Family law
- Computer forensics
Additional Certification Options
You can also seek out additional certifications available for experienced forensic accountants, which may be preferred by employers. The American College of Forensic Examiners International issues the Certified Forensic Accountant credential to licensed CPAs. In addition, the Association of Certified Fraud Examiners (ACFE) issues the Certified Fraud Examiner (CFE) credential. You can earn this credential by joining the ACFE, earning a bachelor's degree and fulfilling work experience requirements.
Alternative Careers
Tax Examiner
Not sure you want to earn a CPA license? You could also pursue a career working for government agencies at the state or federal level as a tax examiner, which requires a bachelor's degree in accounting or a related field. The Internal Revenue Service (IRS) employs tax examiners to review tax filings in order to determine the accuracy of reporting and the regulatory compliance of corporate and personal withholdings, exemptions and deductions. While the BLS projected slower than average growth for this career field from 2010-2020, demand for tax examiners was expected to remain strong. In May 2011, tax examiners, collectors and revenue agents earned a mean salary of about $55,000.
Lawyer
Still want to handle forensic litigation, but think you would like being a lawyer better? To be a lawyer, you'll need many of the same qualities necessary for forensic accountants. For instance, the ability to analyze information, interpret complex data and evaluate evidence are essential traits for lawyers as well as forensic accountants. Also, excellent communication skills are often the hallmark of a skilled attorney. To practice law, you will need to obtain a Juris Doctor (J.D.), which can often entail about seven years of postsecondary academic work and additional tuition costs. Lawyers, however, earned a mean salary of about $130,000, based on BLS data as of May 2011.
