Rachel Drummond, MEd
Crime leaves clues, and in the case of forensic accounting, the evidence is in the numbers. Forensic accountants help disrupt large-scale crime. For example, in 2009, Bernie Madoff was convicted of a Ponzi scheme for stealing tens of billions of dollars from thousands of people over 17 years. Forensic accountants were credited with determining fault in this case and explaining the complicated financial transactions that led to this high-profile conviction.
For better or worse, the increased instances of fraud and computer-based crimes are helping drive the demand for forensic accountants. Financial accountants are tasked with the financial analysis of all facets of financial crime to prevent fraud and uncover intentional or accidental mistakes. Their responsibilities include physical and digital evidence collection, funds tracing, asset identification, and due diligence through internal and external financial audits.
The American Board of Forensic Accounting (ABFA) defines this position as “a professional who performs an orderly analysis, investigation, inquiry, test, inspection, or examination in order to obtain the truth and form an expert opinion.” The ABFA’s mission is to preemptively address financial inefficiencies, proactively address financial fraud, and promote forensic reporting.
A forensic accountant is a certified public accountant that can examine financial records and accounts that could then be used as legal evidence. Forensic accountants will often work in areas where they can help prove or disprove insurance claims and personal injury claims. This type of accountant can also work to help resolve business disputes, divorces, and fraud cases. In some instances, the accountant may also be able to help with criminal cases. Accountants who work within this specialty can also testify in court as experts.
Forensic accountant specialty can be interesting for those who desire to do meticulous work with numbers while also working to solve interesting problems and uncover hidden or missed details. Furthermore, career growth in this field will increase steadily in the coming years.
Read on to learn more about becoming a forensic accountant, including a step-by-step career guide, salary, and career outlook.
The future looks promising for forensic accountants, with a steady outlook for career growth projected in the coming decade. According to the U.S. Bureau of Labor Statistics (BLS), growth in the accounting and auditing career is expected to be 7 percent from 2020 to 2030. In 2021, there were nearly 1.4 million accountant jobs, and the projected growth could add 96,000 new positions across the country.
Forensic accounting is a sub-specialty of accounting that is not specifically tracked by the BLS and will have fewer job openings. However, because accounting is such a solid field, those who want to pursue this specialty may be able to obtain a job as a CPA and eventually specialize after gaining experience, education, and certification in forensic accounting.
The Association of Certified Fraud Examiners (ACFE) offers help for those looking at forensic accounting career paths. In addition, organizations such as the National Association of Forensic Accountants (NAFA) offer training and certification for those entering the field. Both organizations offer training opportunities that can lead to better job opportunities for skilled and certified professionals.
According to the BLS (May 2021), the average annual wage for the roughly 1.3 million accountants and auditors in the United States was $83,980. However, it is essential to remember that various factors can affect accountants’ salaries, such as the accountant’s amount of experience in forensic accounting, the geographic location, and where the individual works.
Here are the latest percentiles for accountants and auditors across the country:
There is significant training involved because of the law’s intricacies and accounting standards necessary to be an effective forensic accountant. While the steps an individual takes may not necessarily mirror the following exactly, due to government regulations, this is the most common path to becoming an accountant.
Step 1: Earn a high school diploma or GED (four years) – A successful career as a forensic accountant starts in high school. It is crucial to earn a diploma (or get a GED) and focus on any available advanced math or business courses to gain admission into an accredited undergraduate program in accounting.
Step 2: Earn an undergraduate degree (four years) – Accountants of any specialty must earn an undergraduate degree. It may be most helpful to study accounting, but it is possible to major in something like economics or business. Prospective CPAs should consider the CPA requirements for their state before deciding upon a major.
For example, Southern New Hampshire University (SNHU) offers an online bachelor of science in forensic accounting. This 120-credit program teaches strong foundations in traditional accounting with a concentration in forensic accounting and fraud examination.
Courses include business law, finance, business systems analysis and design, and strategic management. Graduates from this program are eligible to sit for the Certified Fraud Examiner (CFE) exam, which can increase graduates’ job prospects. This program also prepares graduates with a solid foundation for CPA exam eligibility.
Step 3: Become licensed as a CPA (timeline varies) – To work in any specialty, an accountant must earn the Certified Professional Accountant credential. Every state has its requirements (consisting of different levels of experience and training) to sit for the CPA exam, so prospective CPAs should familiarize themselves with the state’s Board of Accountancy requirements where they want to work.
According to the BLS, most states require licensed CPAs to meet the following criteria:
Step 4: Gain experience in accounting (timeline varies) – Accounting graduates can often find internships or entry-level work while studying for the CPA exam. Some forensic accountant certification exams require a minimum number of years of experience to be eligible to take the exam. For example, before applying to take the Certified Fraud Examiner (CFE) exam, applicants must be members of the ACFE and have at least two years of fraud-related work experience.
Step 5: Consider advanced education (two to four years) – An advanced degree is not a requirement for working as a forensic accountant. Still, it can help individuals to specialize further and advance their careers. Master’s in forensic account degrees are available for those dedicated to learning more about this specialty.
An exemplary graduate program is West Virginia University’s (WVU) online master of science in forensic and fraud examination (FFE). The 30-credit program curriculum is developed with the National Institute of Justice.
Students take ten courses, including six content courses in auditing, information technology, financial and managerial accounting. The remaining four courses include electives in simulated case studies and MBA business courses. A CFE exam prep course is included in the tuition for this program.
Step 6: Pursue forensic accounting certification (timeline varies) – In addition to advanced education, forensic accountants may pursue professional certification. Here are three organizations offering forensic accounting credentials:
In summary, depending on how in-depth one wants to go with their training, a high school graduate will have at least four years of college followed by the time it takes to earn a CPA license before truly starting work as a forensic accountant. Indeed, many successful forensic accountants go even further to pursue a master’s degree and certification, which can take two years.
Please see our guide to Colleges with Forensic Accounting Programs for a comprehensive list of forensic accounting degree programs, including associate’s, bachelor’s, master’s degrees, and certificate programs.
Forensic accountants have unique skill sets that help them do their jobs well. This includes the ability to think analytically and pay attention to accuracy. Math skills are essential as knowledge of local, state, and federal regulations change frequently. In addition, forensic accountants must keep detailed and organized records for their clients in the event of an audit.
Skills and tasks a forensic accountant must master to succeed in their work include:
Most forensic accountants will want to become CPAs or certified public accountants. Forensic accountants and fraud examiners can increase their chances of getting more job offers or promotions with multiple certifications. In addition, professionals who file reports with the Securities and Exchange Commission (SEC) must be licensed CPAs.
In addition to the forensic accounting certifications in the step-by-step guide above, there are credentials available:
Rachel Drummond, MEd
Rachel Drummond has given her writing expertise to ForensicsColleges.com since 2019, where she provides a unique perspective on the intersection of education, mindfulness, and the forensic sciences. Her work encourages those in the field to consider the role of mental and physical well-being in their professional success.
Rachel is a writer, educator, and coach from Oregon. She has a master’s degree in education (MEd) and has over 15 years of experience teaching English, public speaking, and mindfulness to international audiences in the United States, Japan, and Spain. She writes about the mind-body benefits of contemplative movement practices like yoga on her blog, inviting people to prioritize their unique version of well-being and empowering everyone to live healthier and more balanced lives.