How Forensic Accounting Benefits the Workplace
Forensic accounting is the fastest growing accounting specialty in the U.S. today with good reason. The use of forensic accountants can help businesses minimize fraud and theft and even avoid lawsuits or other legal action in many cases, which translates into substantial savings of both time and money.
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Definition
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The word "forensic" refers to something that could be (or will be) used in a court of law. Thus, forensic accounting is a subset of accounting that is completed to standards suitable for legal review, and ultimately dispute resolution through the integration of auditing, investigatory and standard accounting measures. Corporations, law enforcement and government agencies, insurance companies, courts and others hire forensic accountants for purposes of investigating potential financial wrongdoing and, more and more, to assist the company in preventing such situations.
Benefits
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Companies that employ forensic accountants enjoy many benefits. Accountants can work to prevent fraud from occurring through monitoring financial records and transactions, allowing companies to further investigate and stop illegal or ethical activities early. This not only benefits a company in terms of avoiding or minimizing legal action; it can also result in hefty monetary savings. In addition to their ability to scrutinize revenue streams, incomes and business expenditures of individuals and businesses, forensic accountants are trained in how to present this information, both in succinct written format and, more specifically, in court. During the course of auditing, forensic accountants can help uncover not only theft, but also wasteful spending and fraud.
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Potential
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According to the Bureau of Labor Statistics, the job outlook for careers in the field of forensic accounting is excellent. Job opportunities are expected to continue to grow through the next decade as a result of stricter auditing regulations and an expanding economy. While some are retained by companies as a part of their regular finance team, in other cases forensic accountants are brought in from the outside to investigate an agency's financial records. Opportunities for forensic accountants can be found in nearly every industry, although the largest proportion of them are employed in private agencies and do contract work for other businesses or legal entities.
Considerations
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Individuals who are considering a career in forensic accounting should be interested in the law, good with math, excellent communicators and detail-oriented. The first step to becoming a forensic accountant is to get a degree in accounting. Most employers require, minimally, a Bachelor's degree; however, there are some two-year accountancy programs. Forensic accountants are generally CPAs (Certified Public Accountants) with either an add-on certificate in forensic accounting or an extensive background in criminal justice and legal coursework. Many colleges and universities with larger accounting departments typically offer a graduate certificates in forensic accounting.
Function
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Forensic accountants uncover theft, fraud or waste through careful, systematic scrutinization of a company or individual's financial records. They are trained to recognize patterns that are indicative of account falsification and manipulation and deletions in records. An audit and the follow-up report can consist of any number of steps depending on the complexity of the records being investigated. A forensic accountant will summarize transactions, trace assets, perform regressions or other statistical analyses as called for and present findings. After completing audits, a forensic accountant's other primary responsibility is to appear in court as an expert witness.
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