What it takes to be a forensic accountant

When I became a CPA about 40 years ago, forensic accounting wasn’t even a career that was marketed. Working in the white collar crime unit of the FBI was about the only forensic career available when I graduated. Today, it’s hard to turn on the news or scroll through your LinkedIn feed without seeing a new story about financial misconduct. Whether the headlines are about identity theft, embezzlement, misappropriation of assets or Ponzi schemes, the bottom line is that financial fraud is widespread in the U.S. and around the world. 

With all this going on, it’s no wonder that the forensic accounting profession has grown by 3.3% in 2022. Interest in the field has increased to an extent where the U.S. Bureau of Labor Statistics predicts a 4% growth in forensic accounting jobs between 2019 and 2029. What makes forensic accounting even more attractive is that the starting pay is significantly higher than other fields of accounting — close to $100,000. There are several certifications available in forensic accounting, each with varying professional and educational requirements. The challenge is finding the right certification for you. 

What do forensic accountants do?

I refer to forensic accountants as accounting detectives. They deal with all aspects of financial transactions, including financial analysis, cybersecurity, risk management, investment fraud, investment modeling and litigation services. The field is expanding almost faster than the industry can keep up. For example, in divorce proceedings, the forensic accountant will search for any assets the spouses are trying to hide. In corporate disagreements, forensic accountants value assets, comb through financial statements, documents and tax returns, and in general do whatever it takes to paint the full financial picture. 

Then there’s the fraud element. Forensic specialists are bloodhounds for sniffing out white collar crime: securities and bankruptcy fraud, tax evasion, theft and embezzlement. This type of work can be very exciting to those interested in the field.

How to become a forensic accountant

Several years of related work experience and/or experience as a CPA are generally a prerequisite for all forensic certifications. Specifically, you must be a CPA to sit for either the Certified in Financial Forensics exam administered by the American Institute of CPAs or the Certified Forensic Accountant exam given by American Board of Forensic Accounting.

If you are planning to sit for the CPA exam in order to earn your CPA credential, there is good news. Starting in 2024, the CPA exam is changing to a “core plus one discipline” model. Those interested in forensic accounting as a career should select the Tax Compliance and Planning discipline, as it covers many of the topics one would see in this field.

Other professional certification organizations do not require the candidate to be a CPA, even though it would be very beneficial. The Association of Certified Fraud Examiners offers the Certified Fraud Examiner credentialing exam to bachelor’s-prepared ACFE members with at least two years of professional experience in internal auditing, criminology, fraud investigation or loss prevention. The American Association for Investment and Financial Management administers the Certified Forensic Accounting Expert, for which you must have a bachelor’s degree, experience and 25 hours of forensic training. The Chartered Financial Analyst exam administered by the CFA Institute requires the completion of the CFA program as well as acceptable work experience. 

Skills that forensic accountants need

A good forensic accountant has strong communication skills across the board. These soft skills are critical when considering the detective piece of the profession. Specific skills sets include: 

• Oral communication skills: One of the most challenging tasks of a forensic accountant is extracting information from individuals who are trying to hide the truth. In this business, everything needs to be questioned until there are no loose ends. A forensic accountant needs the ability to strategically conduct interviews and, at times, cross-examine individuals in a court of law. Some of the best forensic accountants I’ve ever seen are attorneys because of their interrogation skills. 
• Critical thinking: Individuals with strong critical thinking skills do well in this profession because they can analyze data and connect the dots. They excel at asking what data means beyond the raw numbers. 
• Excellent writing skills: Once information has been extracted, the accountant must organize and prepare written documents in order to substantiate the findings. Summaries of findings must be accurate, succinct and coherent. 
• Attention to detail and patience: A forensic accountant needs the patience to examine hundreds or thousands of documents, pick out the ones that are relevant and analyze the data so a clear picture of the financial situation is revealed. Successful forensic accountants don’t mind the tedium of continuous searching until they find that “Aha!” document that is the last piece of the puzzle. Anyone with solid investigative skills would also be a good candidate for forensic accounting since sleuthing is definitely required. 
• A tech background: It’s impossible to conduct research without some degree of technical skills. A good forensic accountant knows the benefits as well as the challenges of using technological tools to gather information. For example, what methods are used to extract data from multiple sources? Data mining and extraction tools have been developed that forensics accountants can use, thus making this career choice attractive to Generation Z. 

The future of the profession

The need for forensic accountants will only increase as the world becomes more digitized. Individuals and companies want assurance that online transactions are not manipulated or unauthorized; they want their assets to be secure. In today’s world, every time you or your employees connect to the internet, a digital footprint is created. With the never-ending issues surrounding cybersecurity, how could those footprints be used? That data can be collected and manipulated without anyone knowing it, so isn’t it fortunate that we have forensic accountants? 

So what does the future hold? Most businesses will need the services of a forensic accountant at some time to deal with specific issues. One of the biggest challenges will be the anonymity of cryptocurrency transactions. When the workplace becomes 100% digital, what will replace the paper trail that accountants used to follow? The profession will have to wait and see.