Forensic Accounting: Investigation of Fraud and Criminal Activity in the Modern Business World

Alarming sums of money are stolen fromensure that there is no suspicious financial activity
businesses each year by trusted employees.  Itsurrounding the case.  Copywriting and patent
is estimated that in 2008, at least $6 Billion will beinfringement, insurance fraud, personal injury, and
lost by businesses as a result of fraudulentconstruction audits are among the kinds of cases
activities.  Surprisingly, smaller companies sufferthat forensic accountants are often called upon to
the majority of the losses.  This is due to theirinvestigate. Police departments hire forensic
lack of funds to implement preventativeaccountants for many of the same reasons,
procedures in concert with a generally strongerespecially to gather evidence for prosecution that
trust and more personal relationship withwill stand up in court.
employees.  In order to prosecute those 
responsible for these crimes, it is important toForensic accounting professionals express a high
understand the path leading to the fraud.level of job satisfaction.  The profession typically
 offers excellent compensation ($100K+/year) and
Forensic accounting is a rapidly expanding fieldthe investigative work is very intellectually
involving careful investigative work, in depthchallenging.  There is always something new and
financial analysis and an understanding of the legalexciting to work on every day.  It is clearly
system.  Forensic accountants must think onextremely rewarding to be able to identify those
their feet and work side-by-side with lawresponsible for stealing millions of dollars and in
enforcement personnel in order to solve thesome cases for saving businesses.
puzzles surrounding fraud cases.  Frequently they 
are required to testify in court as expertUntil more educational institutions start offering
witnesses and provide key evidence leading toforensic accounting programs, employers often
convictions.  Evidence is gathered from bookslook for Certified Public Accountants, who are
and other records including computers, hardcertified in Fraud Examination to fill forensic
drives, and email correspondence and computeraccounting positions.  It is preferred that the job
records.  It is then carefully traced back tocandidates have accounting experience and a
where the problem first began.  Forensicgood knowledge of the law along with strong
accountants act as detectives, lawyers,computer science, writing and investigative skills. 
CPA’s and scientists.  These professionalsBackground checks and reference checks are also
often have highly developed deductive reasoningnecessary to ensure that new employees have a
skills, familiarity with legal procedures, good writingclear criminal record and a good reputation in the
skills and excellent public speaking skills.  Theycommunity.
have the responsibility of convincing a judge and 
jury that the evidence they have gathered isForensic accountants are vital to the survival of
solid.  Forensic accounting played a large role inboth large and small companies.  There will
convicting Al Capone for tax evasion.  It alsoalways be new work to do as technology
figured prominently in exposing the Enron andadvances.  People with an interest in accounting
WorldCom scandals.and detective work who are inspired to identify
 criminal activity and therefore prevent business
As technology improves and the amount offailures should consider this as a career option.
money stolen from companies and corporations Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  References
grows, the demand for forensic accountants hasEchie, K. (September, 2008). The Training and
grown rapidly. Considered to be one of theSkills You Need to Become a
fastest growing accounting jobs, it is predicted 
that this profession will be among the top twenty       Forensic  Accountant. Retrieved
in the next few years.  Schools have begun toSeptember 30, 2008.
offer programs in this field to help meet theGold, L. (August, 2007). Litigation Support: Can I
strong and ever increasing demand for forensicGet a Witness? Accounting
accountants. 
       Today, Volume 21, No. 15. Page 1.
In the computer age, fraud comes in manyRetrieved September 30, 2008 from:
forms.  It is much easier for criminals to 
embezzle money without detection.  This is why       LexixNexis Academic Database.
forensic accountants typically need advancedMoncliff, J. CSI of Accounting Jobs. Retrieved
computer knowledge.  They must be able toSeptember 30, 2008.
extract evidence from computer hard drives. Ray, R. (October, 2007). Experts in Detecting
Business owners look to forensic accountants toFinancial Misbehavior Match
help implement preventative measures.  Many 
businesses hire these professionals to examine        Wits With Fraud Artists in a Rapidly
documents and computers regularly so that theGrowing Field. The Globe and Mall.
chances of a serious problem are minimized.  
Forensic accountants also find employment in        Retrieved September 30, 2008
police departments, law firms and governmentalfrom: LexixNexis Academic Database.
agencies such as the FBI and the IRS. Russell, M (April, 2007). Be a Financial Detective.
 Retrieved September 30,
While working for a law firm, there are a variety 
of legal disputes that a forensic accountant may        2008.
assist in.  In divorce cases, assistance is neededStone, J. (November, 2006). Forensic Accounting
in dividing assets.  Disputed assets are oftenThe Detective Breed of
investigated behind the scenes in order to 
determine the most equitable way to split them         Accounting Careers. Retrieved
as well as determine if both parties are credible.October 22, 2008.
 Forensic accountants also assist lawyers inWinters, A. G. Forensic Accounting. Retrieved
bankruptcy cases.  Evidence is gathered toSeptember 30, 2008.