Forensic Accounting career path: Everything from required certifications and salary

• A career in Forensic Accounting and Auditing is witnessing great demand.
• But what exactly do forensic accountants do? How can one have a career in Forensic Accounting?
• In today’s article, Himanshu Sarpal, a CA by qualification shares the exact strategy he used to start his journey in Forensic Accounting.
• He also tells us what exactly one needs to be a Forensic Accountant. 

What is Forensic Accounting?

Where there are questions about financial transparency, legitimacy, or shenanigans, you’ll find a need for Forensic Accounting/Auditing.

For instance, ABC & Co., on the recommendation of its Chief Operating Officer (COO), entered into a contract with XYZ & Co. for the supply of Product X.

At the time, XYZ & Co. was not authorized to conduct business because its license was suspended due to certain irregularities in taxes paid.

The COO had knowledge of this fact but still recommended that ABC & Co. enter into a contract with XYZ Co. because he was secretly receiving compensation from XYZ & Co. for doing so.

Forensic Audits can reveal cases of potential fraud as mentioned above.

What is the Role of a Forensic Accountant?

The requirement of Forensic Accounting comes due to a high rate of white-collar crimes all over the world. Like manipulated financial statements, vendor favoritism, dummy vendors/customers, and other wrongdoings.

So the role of a Forensic Accountant is to investigate such matters done by the various perpetrators whether they are internal or external persons.

Moreover, it also helps regulatory bodies like RBI, SEBI, MCA, SFIO, etc to investigate the matters.

Recently, RBI has also issued a circular that states that high-value borrowers mandatorily come under the purview of Forensic Audit.

So you can imagine the need for Forensic Audit/ Accounting in India.

Who can Become a Forensic Accountant?

It is NOT necessary for one to be a Chartered Accountant/CPA to be a Forensic Accountant.

Every forensic team consists of professionals from diversified areas.

An ideal forensic team consists of– Chartered Accountants, Engineers, MBAs, MBEs, Lawyers, Semi Qualified Chartered Accountants, other professionals, and fresh graduates as well.

Forensics is NOT only checking accounting records/Financial Statements. It has a wider range of services like Business Intelligence, Investigation, Asset Tracing, Anti-Bribery Measures, Dispute Resolution mechanisms, Brand Protection, and a lot more.

Forensic Accounting Firms

It is a total myth that forensic practice can be set up only by the top Chartered Accountancy / CPA firms. Other than Big 4 Accounting Firms many other small/mid-sized firms are working in the Field of Forensic Audit.

Indian Banks Association has a list of 72 Forensic Accounting Firms.

So if you are not getting an opportunity in a Big 4 Firm or a Big 10 Firm – Start your Forensic Accounting Journey in other equally amazing smaller firms.

How to become a Forensic Accountant?

• Nowadays, since processes in every organization are technology-driven, almost all organizations have set up their own Risk Assurance Department. This department works hand in hand with third-party Forensic Auditors.
• These teams also investigate the matters/complaints made through the anonymous whistleblower letter in the organization.
• There are many organizations that also have their in-house separate Forensic Audit Team.
• Forensic Accountants/Auditors also help investors do their due diligence, analyzing deals to check out potential fraud. They investigate bankruptcies, mergers, and acquisitions, to make sure all parties involved are showing their cards.
• Forensic accountants help law firms in divorce cases, dragging out any financial skeletons in the closet. They also work in insurance companies verifying whether claims are legitimate etc.
• In short, where there is a chance of Accounting Fraud you will find an opportunity for a Forensic Accountant.
• Also, every forensic accounting case is different. The modus operandi used by fraudsters is new to the Forensic Auditor. This ultimately creates a challenge for the forensic auditor to crack the case in the best possible manner. Thus the job of a Forensic Accountant is not boring or routine. So people usually enjoy being Forensic Accountants/Auditors.
• Forensic Auditors/Accountants can move into a Risk Advisory Department i.e., the Internal Audit division of any organization if they wish to.

The scope of Forensic Accounting outside India 

The emergence of Forensic Accounting in India comes from other developed countries.

So, scope-wise it is one of the emerging areas for finance professionals in India as well as outside India.

In the US and other developed countries, there are other careers you can get into with a forensic accounting degree or forensic accounting experience. You can become a CIA Analyst, Criminalist, Expert Witness, FBI Agent, Fraud Investigator, ICE Agent, Insurance Claims Investigator, Legal Consultant, Private Investigator, etc.

What are the Forensic Accounting Certifications?

Unlike many other professions, there are no official education requirements for Forensic Accountants.

Mostly many Forensic Accountants / Auditors are Certified Public Accountants (CPA) and Chartered Accountants (CA).

However, gaining the need for Forensic Accounting – Various Forensic Accounting Degree Programs are offered by different Institutes in India and abroad. Anyone pursuing these Forensic Accounting Degrees can get a good idea about detecting fraud.

There are many International certification courses also available to be a Certified Forensic Accountant. However, the Association of Certified Fraud Examiners (ACFE) – Certified Fraud Examiner (CFE) is the most recognized.

The ICAI has also started one certification course – Certificate Course on Forensic Accounting and Fraud Detection.

Also in India and globally a lot of Forensic Accounting courses can be done while still in college.

What is the skill set required to become a Forensic Accountant?

In my personal opinion, the following qualities would be needed:

• Detail-oriented
• Ethical (Personal relations and emotions cannot be allowed to influence any aspect of forensic audit)
• Analytical
• Must see things beyond the books and must be Curious
• Confident: The presence of a Forensic Accountant/ Auditor is not always appreciated as the outcome of their efforts could have legal serious repercussions. This, in turn, calls for an individual of unshakable confidence and conviction.
• One must be aware of the current affairs of the economy.
• Enough patience, because sometimes it takes a long time to detect the modus operandi of the fraudster.
• Must be team players – As they are likely to work in environments where they must collaborate with other professionals.
• Never Give Up Attitude

My day as a Forensic Accountant

Being a forensic auditor involves a lot of client interaction. This helps us to understand the policies and processes of the organization so we can discover and analyze things.

• Most days we have meetings with the top management of various organizations. Thus giving one great exposure to client interaction. It also teaches how different people think.
• So our day consists of a lot of Discovery and Analysis (examining the evidence)of the things we have discovered.
• All we have discovered and analyzed needs to be reported. So reporting is also another important part of my day.
• Every new day is a challenge for me to give my best to the organizations with whom I work.

Forensic Accounting interview tips

• One must be aware of what exactly is Forensic Accounting and how it differs from other fields of auditing.
• Must be aware of various sections of the Companies Act 2013, which deals with forensic audits and frauds. For example, Section 447 defines the meaning of fraud.
• Must also have knowledge about – Other laws like the Prevention of Corruption Act and Insolvency and Bankruptcy Code, 2016.
• Must have theoretical knowledge of Market Intelligence, the IBC Act, FCPA, and the UK Bribery Act.
• Must also know about various financial statement frauds in India and outside India and current affairs of the economy, as a lot of frauds have been reported by the media of our country in the past few months.
• To be a forensic auditor, as I mentioned above, a lot of client interaction is involved in the profile, one must have good communication skills whether in English or Hindi.
• In our society, our knowledge is judged on the basis of our English-speaking capabilities but trust me if you have proper content/knowledge you will be confident to speak to anybody on any given topic even in Hindi.
• Having a good knowledge of computer software programs, including Microsoft Word, Excel, and PowerPoint is important. This helps in gathering and analyzing information.
• Job candidates will need to learn online research skills and the use of database management and analytical software

Now It’s Your Turn!!!

And now I’d like to hear from you:

Would you want to become a forensic accountant?

Or maybe you have a question about something you read.

Either way, let me know by leaving a comment below right now. If you have a specific question, comment below and I will connect you to Himanshu or anyone capable of helping you.