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How to Become a Forensic Accountant: An Investigation

Spreadsheet bank accounts accounting with calculator and magnifying glass. Concept for financial fraud investigation, audit and analysis.

Do you want to assist in the investigation of financial crimes? Do you want to work with law firms, government agencies, and corporations to help them investigate financial fraud? Does assisting in an investigation and tracking down digital evidence used during trials sound like an exciting career? If so, becoming a Forensic Accountant might be a great career choice for you.

Becoming a Forensic Accountant is more than just understanding the balance sheet. Here’s what you need to know:

  • Forensic accountants are trained to analyze financial transactions and records. They also know how to interpret them for legal proceedings.
  • They must be meticulous when providing accurate information that will stand up in court against other experts who may present different opinions or interpretations of the data.

In this article, we’ll cover all you need to know about a forensic accountant, salaries, statistics, and more helpful information about this career. Keep reading to learn more.

8 Steps to Become a Forensic Accountant

Check out below some of the steps you need to take to become a forensic accountant.

  1. Choose Bachelor’s degree programs in accounting that the AICPA approves. Concentrate on forensic accounting and fraud investigation areas if you want to specialize.
  2. Inexperienced job seekers should choose programs that provide career experience or part-time work in accounting-related fields.
  3. Consider a master’s or certificate program in forensic accounting that will fulfill the educational requirements for CPA licensing.
  4. To be a CPA, you need to complete the requirements. This means two years of experience in accountancy-related work.
  5. Register for the CPA examination six months before you want to take it.
  6. Pass the CPA exam.
  7. Search for a forensic accounting work position or get certified as a forensic accountant.
  8. After you are hired, complete on-the-job training.

How to Become a Forensic Accountant

Forensic accountants are in high demand due to their ability to investigate complex financial crimes. If you want to become a forensic accountant, there are some essential steps that you need to take.

First, you need to have a strong background in accounting. Forensic accountants must be able to track and interpret financial data accurately. You also need strong analytical skills to help you identify any potential criminal activity.

Second, it is vital to develop your investigative skills. Forensic accountants often work with law enforcement officials to piece together evidence of financial crimes. It’s essential to be familiar with the legal system to understand the relevant laws related to your investigations.

Finally, it is essential to stay up-to-date on the latest trends and developments in the accounting industry.

If you like crunching numbers while also delving into the causes behind fraudulent transactions or dirty financial activities, becoming a forensic accountant may be the perfect job for you.

According to National University, this area of study has lately gotten much attention due to forensic accounting and financial fraud investigator Harry Markopolos. Markopolos discovered Bernie Madoff’s wealth management company to be one of the largest Ponzi scams in U.S. history.

Even in the most peaceful of times, criminal tax investigations have provided several challenges. These include gathering and analyzing evidence from potential targets and witnesses and establishing forensics profiles.

For example, forensic accountants work with the federal government on cases that have resulted in white-collar criminals, including drug traffickers, being brought to justice.

Skills You Need in a Forensic Accounting Career

You need many skills to be successful as a forensic accountant. The first and most important skill is the ability to think critically. As a forensic accountant, you will often be called upon to analyze complex financial data and find discrepancies.

You also need strong math skills, as much of your work will involve calculations. Additionally, you must communicate effectively both verbally and in writing. Communication is crucial because you will have to present your findings to attorneys, judges, and other professionals.

It is also helpful to know computers and how they work. Computer literacy will allow you to examine digital evidence more efficiently.

When choosing a course of study, start by studying accounting and criminology. Classes in computer science and information technology will be beneficial to you.

Finally, you will need to learn about the legal system to work with attorneys more effectively.

Related Resource: How to Become a Forensics and Crime Investigator

Education You Need for a Forensic Accounting Career

To work as a forensic accountant, you’ll need a bachelor’s or master’s degree in accounting or finance.

Students who wish to pursue a career in forensics accounting can do so in various schools, including those that offer an academic degree.
They may also specialize in accounting or finance while adding courses in criminal justice to their curriculum.

You don’t need a special license to work as a forensic accountant. However, you may wish to pursue the Certified Fraud Examiner (CFE) credential designation to sit for the CFE exam. The CFE certification is not a condition for becoming a forensic accountant. It does assist individuals in demonstrating a great deal of expertise in this area.

A CFE designation may boost your income by 30% compared to those without the certification.

Certified forensic accountants must regularly take continuing education courses to maintain their accreditation.

Beneficial Degrees for a Forensic Accounting Career

Bachelor’s Degree in Forensic Accounting

A bachelor’s degree in forensic accounting is the most common route to becoming a forensic accountant. A forensic accounting program will provide you with a strong foundation in accounting principles and procedures, as well as criminal justice topics like law, evidence gathering, and fraud investigation.

If you are already working in accounting, law enforcement, or criminal justice, consider pursuing a certificate or diploma in forensic accounting instead of a full degree. These shorter programs can be completed relatively quickly and give you the specialized knowledge you need to start your career as a forensic accountant.

No matter which path you choose, make sure the school you select is accredited by the American Institute of Certified Public Accountants (AICPA).

GetEducated’s Pick: Bachelor of Arts / Bachelor of Science in Accounting / Forensic Accounting from Eastern Oregon University

Accounting

Another necessary degree to have if you want to get into a forensic accounting career is a bachelor’s degree in accounting. An accounting degree allows you to know accounting basics and gives you a strong foundation in math and business. Also, having this can help with another career option since accountants are needed everywhere worldwide.

Criminal Justice

You don’t necessarily have to major in accounting to become a forensic accountant. A degree in criminal justice can also benefit this career because forensic accountants are often called upon to investigate white-collar crimes.

Since criminal justice majors learn about the investigation process and how to examine the evidence, it can give you a strong foundation for a career as a forensic accountant.

A criminal justice degree will make you more marketable overall. And could lead to other opportunities within the field of law enforcement or private investigations.

If you’re not sure if you want to focus on accounting specifically, a degree in criminal justice may be the perfect option for you.

Related Resource: Highest Paying Criminal Justice Careers by Education Level

Special Certifications You May Need for a Forensic Accounting Career

After acquiring the education and experience needed to become a forensic accountant, you might need to pursue additional certifications to work as one. 

These are typically voluntary but could increase your marketability.

CFE Certification

Certified Forensic Accountant is an advanced designation offered by The American College, which shows that an individual has met all requirements necessary for this credential. 

These requirements include passing three exams with at least 70% within two years after completing their program.

Enrolled Agent Status

Enrolled Agent Status allows accountants who practice national taxation before the Internal Revenue Service (IRS) or similar agencies offering federal tax consultation services.

They can represent clients before the IRS during audits and appeals hearings, negotiate settlement agreements and prepare any tax-related documents.

Certified Public Accountant Certification (CPA)

CPAs must pass an exam administered by their state board of accountancy and are required to continue their education to maintain licensure. If you want to specialize in forensic accounting, you must become certified as a CPA.

Becoming a CPA will show employers you have the proper skills and knowledge needed for the job. Additionally, pursuing other certifications such as the CFE can help set you apart from other applicants and demonstrate your commitment to the field.

By following these tips, you’ll be well on your way to launching a successful career as a forensic accountant.

The Working Environment of a Forensic Accountant

Forensic accountants may work for other financial companies such as public accounting firms, insurance businesses, or banks.

Forensic accountants can testify in court as expert witnesses in fraud or embezzlement cases because of their distinct talent set. And, they may also collaborate with law enforcement during investigations. Forensic accountants are sometimes employed directly by the Federal Bureau of Investigation (FBI).

The forensic accountant’s working environment can be demanding. 

Forensic accountants may also work in several areas in the fight against financial fraud, including detection, investigation, and prosecution. These experts can perform regulatory compliance, financial analysis, case accounting investigation, and litigation support.

Firms frequently employ forensic accountants to guarantee regulatory compliance and prevent fraud by enhancing security in the corporate world.

Forensic accountants may follow money trails and prevent employee wrongdoing in their investigations. Forensic accountants frequently discover fraudulent claims in the insurance sector. In contrast, bankers and financial experts may look at various white-collar offenses, including money laundering and embezzlement.

Some law firms employ forensic accountants to assist with litigation support: offering expert witness testimony or counsel on bankruptcy, malpractice, and contract disputes are typical.

Benefits of Being a Forensic Accountant

Being a forensic accountant has plenty of benefits. They include:

  • Work in several industries, including public accounting, corporate accounting, government, and law enforcement.
  • Investigate financial crimes, such as embezzlement, money laundering, and tax evasion.
  • Earn a higher salary than other accountants
  • Help people and organizations by uncovering evidence of financial wrongdoing.
  • Job security and stability.
  • Provide accounting services that are transactional or compliance-based.
  • Work in most countries – Forensic accountants often work as consultants for companies or organizations in different countries.

They have a unique and exciting career.

Drawbacks of Being a Forensic Accountant

Like most careers, being a forensic accountant also has its drawbacks. They include:

  • Forensic accountants are under-appreciated – Many people do not understand what forensic accountants do and how vital their work is.
  • Long working hours – Forensic accountants sometimes work long hours because they have assignments that require a lot of time to prepare and finish. These may include court cases or reports for clients.
  • Forensic accounting can be dangerous because they investigate and provide testimony against criminals.
  • Forensic accountants sometimes have to testify in court.
  • The salary of a forensic accountant isn’t as high compared to other careers with similar education requirements and years spent in school/training for that field.
  • There is little room for advancement or promotion since most companies hire on experience rather than educational background.

Average Salary of a Forensic Accountant

According to PayScale salary data, forensic accountants earn an average of $68,000 per year, with a range of $45,000-$112,000 and a median yearly salary of $68,000.

The forensic accounting PayScale is determined by various factors, including location, sector, role, and qualifications. PayScale notes that the most significant pay difference by location is seen among forensic accountants in Chicago, New York, and Washington, D.C.

Educational background and experience also influence salary rates. According to PayScale data, graduates with a bachelor’s degree in forensic accounting receive $51,000 per year. According to Salary.com, the median annual salary for a master of accounting in forensic accounting is $64,000. Mid-career salaries are considerably more than entry-level workers.

Check out the table below, which illustrates the average annual salary of forensic accountants depending on their experience levels.

ExperienceAnnual Average Salary
0 – 12 months$58,890
1 – 4 years$63,670
5 – 9 years$81,580
10 – 19 years$93,950

Experience Requirements for Forensic Accountants

The experience requirements vary depending on their job and employer. Some entry-level jobs may accept recent graduates. Nevertheless, many employers search for certified accountants with accounting work experience.

CPAs or CFE candidates typically require at least two years of public accounting experience. However, some states accept industry or government accounting knowledge instead. Work experience for CFEs can include: fraud detection, deterrence in accounting and auditing, criminology and sociology, loss prevention, and law.

What You Need to Advance in the Forensic Accounting Career

Since forensic accounting is an advanced field, you must first become a CPA.

After obtaining your degree and working as an accountant for several years, consider taking classes in the area of law that interests you.

Your skills will be transferable to many areas, including personal injury cases, bankruptcy cases, or even criminal defense matters.

Another way to advance in this career is to obtain a master’s degree in accounting. A master’s degree will help you become more well-rounded and can be applied to many types of cases, not just personal injury or criminal defense matters.

Also, consider joining professional organizations like the American Institute of Certified Public Accountants (AICPA).

You can get your CFP certification (Certified Financial Planner).

Because forensic accountants often serve as experts regarding estate planning issues such as tax implications and bankruptcy filings.

The AICPA also offers a forensic accounting certification, which is considered the gold standard in this field.

FAQs

Is Specialization in a Particular Area Possible?

Forensic accountants can specialize in many areas of interest. For example, they might work with the government to investigate fraud cases by analyzing financial statements and company records.

Forensic accountants can also specialize in computer forensics, bankruptcy fraud, insurance claims, and personal injury.

Is Being a CPA Necessary?

Yes. You need to obtain your CPA license to work as a forensic accountant.

Certifications such as the CR.FA, CFE, or CFF can help you find work by allowing you to specialize in particular areas of study.

Related Resource: CPA Online: How to Become an Accountant

What is the Typical Work Week?

Forensic accountants work 40 hours a week. When preparing for a court appearance or trial and during tax season, overtime is frequently necessary.

How Many Years Does It Take to Begin Your Career?

Becoming a forensic accountant can take 4 to 6 years, or longer, depending on what you want to do.

Is Forensic Accounting Hard?

Forensic accounting requires commitment and dedication.

If you consider becoming a forensic accountant, it’s essential to understand that you need to be very detail-oriented.

It takes time, learning, and years of experience to master and become an expert in this field.

What is the Difference Between CPA and Forensic Accounting?

A forensic accountant utilizes accounting, auditing, and investigative skills to conduct investigations in case of theft or fraud.

A CPA (certified public accountant) is a respected financial adviser who has completed the rigorous CPA Exam and has met job experience criteria before being authorized.

Conclusion

There are many benefits you’ll get from being a forensic accountant. It requires in-depth knowledge of accounting, finance, and law. It is a unique career. Now, let’s GetEducated!

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