Forensic Accountant: Career Guide
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Roles vary somewhat based on position and employer, but most forensic accountants use their forensics and accounting expertise to help prevent, detect, and/or prosecute financial crimes. Aspiring forensic accountants can choose from exciting careers in a diverse array of industries and public sector agencies.
Usually detail-oriented, ethical, and analytical problem-solvers, forensic accountants often enjoy varied responsibilities and duties. Depending on their position, employer, and context, these professionals may gather and analyze data, provide security consulting to clients, deliver reports to company executives, or testify as expert witnesses in court.
Entry-level forensic accountants usually hold an accounting or criminal justice bachelor's degree with a specialization in forensic accounting. Some positions require professional certifications and/or master's degrees, as well. Forensic accountants typically obtain certified public accountant (CPA) licensure and pursue forensic accounting credentials such as certified fraud examiner (CFE), certified forensics accountant (CR.FA), or certified in financial forensics (CFF) designations.
Accountants and auditors make a median annual salary of $71,550, according to the U.S. Bureau of Labor Statistics (BLS).
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What Does a Forensic Accountant Do?
Often licensed CPAs, forensic accountants may perform some regular accounting duties while also providing litigation support and/or investigating financial crime cases. These professionals work in many types of industries and organizations and may interact with company executives, clients, forensics teams, or law enforcement agencies.
Investigative responsibilities often include conducting forensic research, auditing, analyzing financial data, and identifying stolen assets. Often employed by insurance companies and banks, forensic accountants may investigate or prevent financial fraud by auditing organizational finances to ensure regulatory compliance. Forensic accountants might also work for accounting firms, providing fraud-prevention consulting to clients.
Some forensic accountants work in criminal justice as employees of law firms or the government. As FBI agents, police department employees, or legal professionals, forensic accountants often provide litigation support in court. Responsibilities include preparing and delivering analytical data and forensic reports in court. Depending on their position and context, forensic accountants may need considerable education and expertise in a wide variety of white-collar crimes.
Forensic accountants with strong business and leadership acumen can advance into management positions. Financial and auditing managers often come from accounting and auditing backgrounds. Excellent forensic accountants with enough professional experience and education may progress into senior positions, become consultants, or open their own accounting firms.
Key Skills for Forensic Accountants
Detail-oriented, analytical, and ethical professionals, forensic accountants require varied hard and soft skills to perform their investigative work skillfully, efficiently, and professionally. These accountants combine technical expertise in relevant financial analysis software and information systems with general research, collaboration, and critical-thinking skills. See below for descriptions of these skills.
DATA/INTELLIGENCE GATHERINGForensic accountants spend considerable time gathering financial data regarding money transfer records, transaction histories, and account activity. These accountants' investigations may also involve collecting nonfinancial evidence and research. Financial crime-solving typically requires sophisticated accounting and research skills and the ability to synthesize varied forms of data.
DATA/INTELLIGENCE ANALYSISThis career requires advanced analysis of financial data and other information relevant to financial crimes. Forensic accountants inform their analyses with expert knowledge of accounting and financial principles, criminal activity, and investigative practices. Analytical software often assists forensic accountants in their data analysis activities.
COMPUTER LITERACYForensic accountants typically boast fluency in analytical software and Microsoft Office. Knowledge and skill in database management system navigation is also essential.
INTEGRITYOften granted security clearances for conducting investigations, forensic accountants need strong personal and professional integrity to maintain organizational security and discern appropriate investigation methods and practices. These professionals must pass background checks and use legal and ethical principles, guidelines, and regulations to guide their work.
COLLABORATIONForensic accountants in large organizations may work in teams, and therefore benefit from excellent collaboration and leadership skills. Skills in communication, project management, teamwork, task delegation, and project coordination prove useful on forensic accounting teams.
Forensic Accountant Daily Tasks
Forensic accountant job duties and activities depend in part on industry context, employer, and position, but most forensic accountants enjoy variety in their daily tasks. A forensic accountant's day often includes at least some of the following activities:
Gathering and analyzing financial data
Compiling and analyzing account and transaction histories
Collaborating with forensics teams
Preparing findings for litigation or legal disputes
Presenting findings to organization executives or courtrooms during trial
Checking and enforcing federal and/or state regulatory compliance on financial and accounting matters
Applying accounting principles
Conducting financial analysis and auditing
Forensic Accountant Salary and Career Outlook
Accountants usually make a good living. The BLS indicates a median annual salary of $71,550 for accountants and auditors as of 2019. It also projects 90,700 new accounting positions and an average 6% job growth rate for accountants from 2018-2028. The BLS indicates that accounting positions are currently growing on par with the national average growth rate for all occupations, but factors such as globalization may increase the demand for accountants with international expertise.
Forensic accountants may enjoy particularly rosy job prospects due to recent increases in both cybercrime rates and financial regulations on industries like banking. Cybercrime types, methods, and rates evolve along with technological advances, and forensic accountants play an important role in stemming this tide. Governmental scrutiny of the financial industry has also increased in the aftermath of major banking scandals such as Enron.
According to PayScale salary data, forensic accountants also make higher median salaries than generalist accountants. The following section discusses the many variables that influence forensic accountant salaries.
Salary Expectations for Forensic Accountants
PayScale salary data for forensic accountants indicates a range of $45,000-$112,000 with a median annual salary of $68,000. Where professionals land on the forensic accounting payscale depends heavily on factors including location, industry, position, and credentials. Forensic accountants in Chicago, New York, and Washington, D.C. feature the highest pay difference by location, according to PayScale.
Educational background and professional experience also influence salary rates. According to PayScale data, graduates with a bachelor of accountancy in forensic accounting earn $51,000 annually, while professionals with a master of accounting in forensic accounting average $64,000 annually. Mid-career forensic accountants make considerably more money than entry-level professionals. The following table provides average annual forensic accounting salary data based on experience level.
Average Annual Salary of Forensic Accountants by Experience
|Experience||Average Annual Salary|
|ENTRY LEVEL (0-12 months)||$58,890|
|EARLY CAREER (1-4 years)||$63,670|
|MID-CAREER (5-9 years)||$81,580|
|EXPERIENCED (10-19 years)||$93,950|
How to Become a Forensic Accountant
The journey toward a forensic accounting career begins with relevant education. Students new to the field usually start by researching and applying to an associate or bachelor's program in criminal justice or accounting with an available specialization in forensic accounting.
Many aspiring accountants follow up their bachelor's degree with certificates or a master's degree in forensic accounting. This helps them reach the 150 credits of postsecondary education required for CPA licensure.
CPA candidates also need professional experience to qualify for CPA examination, so many students work in entry-level jobs during or after their undergraduate or graduate education. Before, during, or after pursuing CPA licensure, forensic accountants may also seek certification from the American Institute of CPAs (AICPA), the Association of Certified Fraud Examiners (ACFE), or the National Association of Forensic Accountants (NAFA).
See below for step-by-step instructions on how to become a forensic accountant. The process typically takes about 6-8 years to complete, depending on the level of education and certification sought.
Steps to Becoming a Forensic Accountant
Research and apply to accredited bachelor's programs in accounting. Choose programs that offer concentrations or electives in forensic accounting and/or fraud examination.
Students lacking professional experience should choose programs that include internships or find part-time work in accounting-related fields.
Consider a master's degree or certificate programs in forensic accounting that meet educational requirements for CPA licensure.
Complete CPA work prerequisites, which typically entail two years of professional accounting-related experience.
Register and study for the CPA examination about six months before the desired test date.
Pass the CPA examination.
Conduct a forensic accounting job search and/or pursue forensic accounting certification.
Once hired, complete on-the-job training.
Forensic Accountant Requirements
To obtain most forensic accounting jobs, candidates need one or more accounting-related degrees and about two years of relevant work experience. Many positions also require CPA licensure plus one or more forensic accounting certifications. See below for more detailed discussions of each forensic accounting requirement.
Education Requirements for Forensic Accountants
Forensic accounting positions typically require a bachelor's degree in forensic accounting, accounting, finance, criminal justice, or a related field, though a two-year degree and four years of relevant professional experience may qualify graduates for CFE certification. Whether pursuing forensic accounting as a major or as a concentration within another major, forensic accounting students must complete coursework in fields such as auditing, fraud examination, and cybersecurity.
Most entry-level accounting jobs accept candidates with a relevant bachelor's degree, but many seek candidates with certifications such as CFE, CFF-AICPA, CPA, or CIA. To meet educational prerequisites for certification, many aspiring forensic accountants enroll in certificate programs or master's programs. Some employers require or prefer candidates with a master's degree in criminal justice or forensic accounting, so master's graduates often enjoy more opportunities for employment, promotion, and salary advancement.
License and Certification Requirements for Forensic Accountants
Many forensic accountants boost their skills, credentials, and job prospects by pursuing CPA licensure from the AICPA. To obtain CPA licensure, candidates must meet education and professional experience prerequisites and successfully complete the CPA examination. In most states, CPA candidates need 150 credit hours of education and 1-2 years of relevant professional experience.
Many forensic accountants also pursue forensic accounting certifications from AICPA, the ACFE, or NAFA. Requirements for these certifications vary, but the ACFE's popular CFE designation entails two years of professional experience, 50 points of education, and successful CFE examination performance. Two years of relevant professional experience may count as one year of accounting education.
Required Experience for Forensic Accountants
Experience requirements vary based on position and employer. Some entry-level jobs may hire recent graduates; however, many employers look for certified accountants with accounting-related work experience.
For CPA or CFE credentials, candidates usually need about two years of relevant professional experience, though state board requirements vary. Generally speaking, CPAs need at least two years in public accounting, though some states may accept industry or government accounting experience instead.
Relevant experience for CFEs includes fraud detection and deterrence in fields such as accounting and auditing, criminology and sociology, loss prevention, and law.
Where Can I Work as a Forensic Accountant?
Forensic accountants enjoy employment options around the world and across public, nonprofit, and private sectors. Most contemporary industries, especially banking and insurance, hire forensic accountants to investigate financial crimes such as fraud. Forensic accountants may also work in law enforcement, the legal system, financial consulting, or accounting firms.
Job opportunities and high salaries often cluster in major metropolitan areas with high costs of living. These areas typically offer more advancement opportunities, but steeper job competition, as well.
Employment and career advancement prospects for forensic accountants depend on many factors, including geographical location. Due to higher population density and commerce rates, major metropolitan areas typically need accounting services more than rural areas do. Salaries typically prove highest in urban areas, but keep in mind that these high salaries reflect the higher costs of living in such places.
Washington, D.C., tops the list of highest-paying states and territories for accountants and auditors. Because of major metropolises, the other top-paying states for these professionals include New York, New Jersey, Virginia, and California.
Annual Mean Wage by State for Accountants and Auditors
|TOP-PAYING STATES||ANNUAL MEAN WAGE|
Depending on position, employer, industry, and sector, forensic accountants can play various roles in financial crime prevention, detection, and prosecution. These professionals may perform roles related to regulatory compliance, financial analysis, investigative accounting, and litigation support. In the private sector, organizations such as banks often hire forensic accountants to ensure regulatory compliance and/or prevent fraud by improving security.
In investigative roles, forensic accountants may trace assets and prevent employee crime. Forensic accountants in the insurance industry often identify fraudulent claims, while accountants in banking and financial industries may investigate various white-collar crimes, such as money laundering and embezzlement.
Governmental organizations also employ forensic accountants to identify regulatory violations in industries such as banking, and criminal justice organizations often rely on forensic accountants to investigate crimes such as fraud.
Some forensic accountants work for law firms performing litigation support duties, which often include providing expert witness testimony or guidance on issues such as bankruptcy, malpractice, and contract disputes.
Frequently Asked Questions
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Is CPA certification necessary to become a forensic accountant?
Professional Resources for Forensic Accountants
This organization of certified forensic accountants promotes education, training, and professionalism.
An international organization with members from 37 countries, this society provides study preparation and certification opportunities.
This network marketing and learning association provides opportunities for professional certification and training.
An organization dedicated to promoting the field of forensic accounting, the ICFA helps accountants develop their craft.
Explore these related careers in the field of criminal justice:
- Blood Spatter Analyst
- Computer Forensics Investigator
- Crime Lab Analyst
- Forensic Anthropologist
- Forensic Ballistics Expert
- Forensic Nurse
- Forensic Psychologist
- Forensic Science Technician
- Crime Scene Investigator
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