Forensic and Investigative Accounting
Chapter 2
Forensic Accounting Education,
Institutions, and Specialties
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Termites, Rust, and Fraud
Just as termites never sleep, fraud never
sleeps.
 Just like termites, fraud can destroy the
foundation of an entity.

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Professors’ Top Ten Topics in
Forensic Accounting Curricula
1.
2.
3.
4.
5.
Fundamentals of fraud.
Financial statement fraud.
Types of fraud.
Cooking the books and problems in
accounting.
Elements of fraud: pressure, opportunity, and
rationalization.
(continued on next slide)
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Professors’ Top Ten Topics in
Forensic Accounting Curricula
Antifraud controls.
7. Internal control evaluation.
8. Theory and methodology of fraud
examination.
9. Principles of ethics and corporate code of
conduct.
10. Fraud detection and deterrence programs.
Practitioners tend to emphasize litigation service
more than professors.
6.
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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)
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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.

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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.
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Forensic Accounting Knowledge Base
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Careers in Forensic Accounting
Parade magazine on April 15, 2007, indicated
that the hottest jobs for college graduates were
forensic accountants.
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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.

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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.

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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
 Chief financial officers
auditors
 Valuators of closely
 FBI agents
held businesses
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Specialties Within Forensic and
Investigative Accounting
Employee Crime Specialist
 Asset Tracing Specialist
 Litigation Services Specialist and
Expert Witness

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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)
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Certified Fraud Examiner
(CFE)
Certified Fraud Specialist
(CFS)
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Forensic Groups and Credentials
The CFFA group becomes:
 Master Analyst Financial Forensics(MAFF)
 Change CFFA to MAFF (twice)
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Forensic Groups and Credentials
Group
Forensic Accounting
Society of North America
(FASNA)
Credential
None
National Association of
Certified Valuation
Analysts (NACVA)
 Certified
Chapter 2
Valuation Analyst
(CVA)
 Certified Forensic Financial
Analyst (CFFA)
 Certified Fraud Deterrence
(CFD) (merged with CFFA
in 2007)
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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)
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Seven Important MAFF Areas
The NACVA’s Master Analyst Financial Forensics lists seven
important areas:
 Financial Litigation Specialization
 Forensic Accounting Specialization
 Business and Intellectual Property Damages Specialization
 Matrimonial Litigation Support Specialization
 Business Valuation in Litigation Specialization
 Bankruptcy/Insolvency Specialization
 Fraud Risk Management Specialization
A description of these areas can be found on their website
http://www.nacva.com/cti/cffa/asp
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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...
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Fundamental Forensic Knowledge of a CFF






Professional responsibilities and practice management.
Laws, courts, and dispute resolution.
Planning and preparation.
Information gathering and preservation (documents
interviews/interrogations, and electronic data).
Discovery.
Reporting, experts, and testimony.
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Difficulties With Fraud
Joseph Wells says
Regrettably, the actual cost of fraud is
unknown and unknowable. It is a
concept the criminologists call “the dark
figure.” Unlike visible crimes such as
robbery, not all frauds are uncovered. Of
those uncovered, not all are reported. No
agency is tasked with compiling
comprehensive data on fraud.
Source: http://www.nysscpa.org/cpajournal/2006/906/infocus/p16.htm
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Predication




The ACFE group indicates that in the private
sector, a fraud investigation should not be
conducted without proper predication.
Examples: Anonymous tips, complaints, audit
inquires, conflict of interest.
Thus, predication is the basis for undertaking a
fraud investigation.
Without predication, the target might be able to
sue for real or imaginary damages.
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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.
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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.
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Increasing Demand for Forensic Accountants




2012 AICPA survey: Noticeable increase in demand
for FA services.
Forty-seven percent of respondents saw an increase in
hours spent.
2011 AICPA survey: one-half of participants had
average increase in FA services of 20 percent.
2011 AICPA survey found 25 percent of participants
hired more FA professionals.
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Society for Financial Examiners
Established in 1973, the Society for Financial
Examiners is a professional organization for
examiners of insurance companies, banks
savings and loans, and credit unions. SOFE
offers three professional designations which are
earned by completing extensive requirements
and a series of examinations.
Source: www.sofe.org/about
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International Association of Asset
Recovery
The International Association of Asset
Recovery (IAAR) has a new certification called
the Certified Specialist in Asset Recovery
(CSAR). The IAAR mission is to help
practitioners to win back assets that rightful
belong to victims, government agencies, other
organizations, or individuals who have been
victimized by criminal or wrongful conduct.
Source: www.iaaronline.org
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Corporate Crime Reporter
The Corporate Crime Reporter is a legal print
newsletter published and mailed 48 times a
year (corporatecrimereporter.com). Some
articles are posted on their website, but are only
highlights from the print newsletter.
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