The Other Accountants: A Look into the World of Forensic Accounting
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In recent years, we have begun to hear more about accountants who are brought in on investigations. What type of investigation is that you might ask? When we say ‘forensics,’ are these the type of profilers featured in episodes of Crime Scene Investigations (CSI) that we enjoy so much? While the answers to these questions may seem obvious to some, there are still a few myths about Forensic Accounting that I would like to demystify. There are similarities between Forensic Accounting and the popular crime show in that when we are called in, there are many unknowns surrounding financial crime cases and the proverbial search for the “smoking gun” that quickly ensues. For example, eDiscovery specialists on a Forensic Accounting team are able to recover documents that have been saved to, altered on, or even deleted from your computer. The team is provided access, at the onset of an investigation, to various technological devices. Imaged hard drives including email inboxes, desktop computer files, mobile phone messages and media, and information from other electronic devices, are meticulously combed through for evidence. This article will take a deeper dive into the work of a forensic accountant and what it will taken to start a career in this field
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The work of a forensic accountant helps companies to combat fraud and other financial crimes including corruption and money laundering. Our services are often solicited reactively in situations where there already exists an alleged wrongdoing. As such, these requests are often accompanied by an atmosphere of crisis. In high-profile cases, external attorneys, government investigators, and regulators are also involved. Company executives and their general counsel can also bring us in to help unravel a series of events for internal investigations in less high-profile cases. Interestingly, a growing number of organizations proactively solicit our services. These companies recognize the need to engage us to perform fraud and money laundering risk assessments of the programs, polices, procedures, and controls currently in place throughout their organizations and to make recommendations for revision, improvement, or overhaul in some cases. The idea is to bring us in early as part of their preemptive measures to prevent future cases of fraud, and other financial crimes as figures for waste and abuse could be staggering.
Unlike typical Audit services, forensic work is usually performed under Consulting Standards. Broadly speaking, in Forensic Accounting, we usually do not provide an opinion nor are we advocates for our clients. Instead, forensic accountants are fact finders brought in to help put the pieces of the puzzle together and tell the story of wrongdoing by helping answer mysteries of who, when, where, how, and how much is involved in a financial crime. In addition to reporting our findings and quantifying the financial crime, we also make recommendations during organizational risk assessments involving fraud, money laundering, and other financial crimes and assessment of compliance programs.
I was recently asked, “Do I need heavy quantitative or judgment skills to do the forensic work that you do?” Forensic accountants possess a range of skills set; however, common skill sets include strong analytical skills, good computational skills, relevant industry knowledge, an understanding of a myriad of fraud schemes, and knowledge of applicable rules and regulations. Not too long ago, the forensic practice required previous work experience such as financial statement audits. However, in recent years, rotation programs have allowed new hires to alternate between audit, tax, forensic, and consulting groups in their first two years out of college. Now, it has become clear that these skills can be honed with on-the-job training and professional practice. Currently, in addition to transfers and rotations, internships are available for accounting students. College graduates are also being offered entry-level positions in forensic practice.
While explaining how the world of forensic accounting is hard work and yet very dynamic and widely interesting, it may be helpful to mention, for those considering a career in this field, that some travel may be required. Although I currently do not travel as heavily, I once spent over a year in Europe while working on one of the largest FCPA investigations in history. Even with travel, adjustments can be made to accommodate and nurture relationships while away on travel for work. For me, traveling to a foreign country to interview an alleged perpetrator, going to the SEC offices in DC to review subpoenaed bank account information to trace illicit funds, or reading headlines of my classified project on the front page of the Wall Street Journal makes it all exciting and worthwhile. After all, Forensic Accounting is the “sexy accounting.”
About the author: Stacy Chineme Esimai, CPA, CFE, is a small business owner in New York City where she consults on forensic projects among other service offerings. She started her career in Tax and Audit. Stacy then went on to fight fraud and corruption for several years on both international and domestic accounts with a leading accounting firm. Stacy currently teaches part-time as a forensic accounting professor at John Jay College of Criminal Justice in Manhattan, NY and can be reached at www.elimmile.com.
