The need for forensic accounting is fast growing in this day and age. Private individuals, as well as big corporations, rely on forensic accountants when they need to resort to court action to address their problems. For company owners, forensic accounting is critical to uncovering fraud carried out by their employees. More importantly, forensic accountants now play a major role in investigating crimes that are conducted over the Internet.
If you’re looking at your possibilities in this profession, learn more about what forensic accounting is and what you can do after you finish a course on it.
What Is Forensic Accounting
Forensic accounting is the practice of auditing a corporation’s records and transactions with the aim of uncovering any fraudulent activities. As opposed to financial audits wherein accountants approach the records of a company to detect inaccuracies that may hurt the company’s finances, forensic accounting approaches the records of a company to detect transactions that may be illegal or unethical.
Moreover, forensic accounting experts usually perform their audits to be used in a court of law, where there’ll be legal proceedings and decisions that would depend on their findings. Whether the purpose is to prove a person’s innocence or guilt of fraud, the forensic accountant checks the records of the concerned parties in their entirety to detect any anomalies.
The main difference between a financial audit and forensic accounting is that for evidence to be acceptable in court, the forensic audits performed should be done at 100% sampling rate. Random samplings are done for financial audits. The court can’t accept evidence collected by a forensic accountant if the whole set of data has not been checked. To learn more about how forensic accounting is maximized in the judicial system, check out New England College online.
Aside from being used for court proceedings, some organizations hire forensic accounting experts to conduct internal audits for risk management purposes. These experts check and certify that all practices done by the company are legal and ethical.
How You Can Make a Career out of Forensic Accounting
Once you’ve completed a Master’s degree in Forensic Accounting, you have quite a few options for careers that you can go into. Here are a few possibilities for you to consider.
- Internal Forensic Auditor
An internal forensic auditor investigates and checks the current records of a financial institution to ensure that the company’s practices and dealings are within the boundaries of legal regulations. Moreover, the internal forensic auditor keeps track of and interprets changes in financial laws to make sure that the organization is still in compliance, considering current operations and the updated laws.
Internal forensic auditors likewise have the critical role of probing the company’s current records to detect weak spots and vulnerability to fraud, theft, and corruption. This is a proactive measure to prevent future issues from cropping up and harming the company.
- Risk Management Internal Auditor
Prospective investment opportunities for financial institutions will also have to be audited by forensic accountants to ensure that all risks are managed and that the company’s future investments will be legally compliant. Forensic accounting audits would cover the company’s risk management in terms of financial risks. Moreover, the work of the risk management internal auditor protects the company’s reputation.
- Legal Consultant
Forensic accountants can assist law firms when dealing with cases involving financial matters. For instance, corruption and embezzlement charges require a lot of background studies on the financial records of both the defendant and the plaintiff. Tracking the flow and possible laundering of finances would be the main focus of forensic accountants when working with law firms.
For certain criminal charges, it would also be critical to check the financial history of the accused party. A thorough look into the accused person’s financial records may uncover financial backing and motive for a certain crime.
- Forensic Accountant for Law Enforcement and Government Agencies
Forensic accounting experts can also have many career opportunities in law enforcement and government agencies. Numerous cases being handled by federal agencies involve a lot of financial traffic and money laundering.
In many cases, the key to solving federal crimes is by following the trail of the money. A major component of organized crime is the flow of support in the form of money to support criminal operations. The forensic accountant uses his expertise to track how the money was used for crime or fraud.
For tax evasion-related cases, forensic auditors are tasked to determine the validity and accuracy of a company’s financial statements.
- Forensic Accountant in Accounting Firms
In many instances, the need for periodic forensic audits is conducted by a third-party accounting firm. Successful accounting firms usually have teams of forensic accountants who are ready to support private financial institutions, law firms, and government agencies.
Armed with a degree in Forensic Accounting, you have many career possibilities in front of you. Forensic accountants serve the community by ensuring that justice is carried out, that fraud and corruption are stopped, and that companies, as well as private parties, are always compliant with the law.