FORENSIC ACCOUNTING
E D U C AT I O N , I N S T I T U T I O N S ,
A N D S P E C I A LT I E S T O
ECONOMICS
PROFESSORS’ TOP TEN TOPICS IN
FORENSIC ACCOUNTING CURRICULA
1.
Fundamentals of fraud.
2.
Financial statement fraud.
3.
Types of fraud.
4.
Cooking the books and problems in accounting.
5.
6.
7.
8.
9.
10.
Elements of fraud: pressure, opportunity, and rationalization.
Antifraud controls.
Internal control evaluation.
Theory and methodology of fraud examination.
Principles of ethics and corporate code of conduct.
Fraud detection and deterrence programs.
Practitioners tend to emphasize litigation service more than professors.
BEHAVIORAL ASPECTS OF FRAUD
(GHOSH ET AL ., 2020)
• Social Context
• Cultural Context
• Psychological Context
• Political Context
• Law Compliance Context
FRAUD BEHAVIOR IN THE CONTEXT OF
BANGLADESH
Source: Ghosh, Sen and Riva (2020)
KNOWLEDGE, SKILLS AND ABILITIES NEEDED BY
FORENSIC ACCOUNTANT
• Law, legal system, courts, and courtroom procedure.
• Financial statement fraud.
• Corporate governance, shareholder rights and litigation, securities laws, and
protections.
• Report writing and communication.
• Criminal law and procedure.
(continued on next slide)
FORENSIC ACCOUNTING KNOWLEDGE BASE
KNOWLEDGE, SKILLS AND ABILITIES NEEDED BY
FORENSIC ACCOUNTANT
• Computer fraud and cybercrime.
• Human factors involved in intelligence gathering, interview techniques and
understanding the motivations for fraud and other criminal activities.
• Ethical issues in business.
• Business valuation.
SKILLS OF A FORENSIC ACCOUNTANT
Analytical Skills
Basic Accounting Skills
Problem Solving Skills
Data Analysis Skills
Interviewing Skills
Verbal Communication Skills
Basic Computer Skills
Mean
6.51
6.31
6.30
6.27
6.25
6.11
6.05
Source: D.A. McMullen and M.H. Sanchez, “A Preliminary Investigation of the Necessary Skills, Education
Requirements, and Training Requirements for Forensic Accountants,” Journal of Forensic and Investigative
Accounting, Vol. 2, Issue 2, July-December, 2010, p.43.
CHARACTERISTICS OF A FORENSIC
ACCOUNTANT
Persistence
Skepticism
Puzzle Skills
People Skills
Flexibility
Works well in teams
Experience in Auditing
Mean
6.12
6.12
6.08
6.04
5.91
5.84
5.80
Source: D.A. McMullen and M.H. Sanchez, “A Preliminary Investigation of the Necessary Skills, Education
Requirements, and Training Requirements for Forensic Accountants,” Journal of Forensic and Investigative
Accounting, Vol. 2, Issue 2, July-December, 2010, p.43.
FIND IT, OR I’LL SUE
Accountants must be attuned to detecting fraud at every level of
service, including standard accounting services, compilations, reviews, and bank
reconciliations. If there is fraud and you don’t detect it, you are going to be
sued, and you will likely lose, as the public perception is the accountant is the
watchdog.
Robert J. DiPasquale, Parsippany, N.J.
Source: H.W. Wolosky, “Forensic Accounting to the Forefront,” Practical Accountant, February 2004, pp.
23-28.
CAREERS IN FORENSIC ACCOUNTING
Parade magazine on April 15, 2007, indicated that the hottest jobs for college graduates were
forensic accountants.
INCOME EXPECTATIONS FOR
FORENSIC ACCOUNTANTS
• Salaries start around $50,000.
• Senior-level government employees can earn between $85,000 to
$95,000.
• In the private sector, one can earn between $125,000 to $150,000.
CONSULTING FEES
• Forensic accountants work with attorneys, private investigators, law enforcement officers,
corporate security specialists, the IRS, and the FBI.
• In 1999, Kessler International stated that the firm charges about $300 per hour for forensic
consultations.
BACKGROUND IN FORENSIC
ACCOUNTING
A forensic accounting background is helpful in
these professional specialties:
•
Accountants
• SEC accountants
•
Consultants
• Bankruptcy specialists
•
Internal auditors
• Professors
•
IRS auditors
• Bank examiners
•
Government auditors
• Chief financial officers
•
FBI agents
• Valuators of closely held businesses
SPECIALTIES WITHIN FORENSIC
AND INVESTIGATIVE
ACCOUNTING
• Employee Crime Specialist
• Asset Tracing Specialist
• Litigation Services Specialist and Expert Witness
FORENSIC GROUPS AND
CREDENTIALS
Group
Credential
American College of
Forensic Examiners
International (ACFEi)
Association of Certified
Fraud Examiners (ACFE)
Association of Certified
Fraud Specialists (ACFS)
Certified Forensic
Accountant (Cr.FA)
Certified Fraud Examiner
(CFE)
Certified Fraud Specialist
(CFS)
FORENSIC GROUPS AND CREDENTIALS
Group
Forensic Accounting
Society of North America
(FASNA)
Credential
None
National Association of
Certified Valuation
Analysts (NACVA)
◼ Certified
Valuation Analyst
(CVA)
◼ Certified Forensic Financial
Analyst (CFFA)
◼ Certified Fraud Deterrence
(CFD) (merged with CFFA
in 2007)
PROFESSIONAL GROUPS AND
CREDENTIALS
Group
National Litigation Support
Services Association
(NLSSA)
Network of Independent
Forensic Accountants (NIFA)
Credential
None
Institute of Business
Appraisers
American Institute of CPAs
Certified Business
Appraiser (CBA)
Certified Financial
Forensics (CFF)
None
CPA CERTIFICATE IMPORTANT
AICPA research indicates that CPAs represent
94 percent of forensic experts hired over two
years.
Source: Field of Forensic Service Remains Hot, A. E. Feldman Blog,
http://blog.aefeldman.com/2009/04/13/field-of-forensic -services-rem...
DEMAND FOR FORENSIC ACCOUNTANTS
Robert Half 2009 Salary Guide indicates that even in the 2009 economic
recession, there was still a strong demand for forensic accountants. In a
2008 AICPA survey, two out of three accountants indicated that their
forensic practices had grown over the past year.
Source: Robert Half, 2009. Robert Half 2009 Salary Guide, Accounting and Finance.
P.R. Newswire, 2008. Demand for Forensic CPAs Accelerates, AICPA, Survey Shows,
New York, September 25, 2008.