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Demand Growing for Forensic Accountants

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By Michael Cohn
June 27, 2014

Ralph Summerford, president of the financial investigation firm Forensic Strategic Solutions in Birmingham, Ala., sees a growing need for forensic accountants and fraud examiners.

He discussed the management of a forensic accounting practice at the Association of Certified Fraud Examiners annual fraud conference in San Antonio, Texas, earlier this month. Summerford sees demand growing for such services.

“There is a lot more emphasis on compliance, but that has been very, very slow in developing,” he said in an interview Friday. “That’s one of the reason there are a lot more people attending the ACFE conference, over 3,000 this year. A lot more of the big companies are seeing they have to spend a lot more money on the compliance side of the business. Internal controls are not enough. They have to go further, training their internal auditors about fraud examination and compliance programs and how to investigate fraud. I see that happening a lot more.”

Ralph Summerford

He believes internal auditors have a better grasp of the issue than outside auditing firms, which have fears of shareholder lawsuits and malpractice claims (see Accountants Face Malpractice Lawsuit Threats).

“Outside auditors don’t understand it as much,” said Summerford. “You’re still going to have the malpractice claims. The accountants are going to get sued when the fraud occurs. There are a lot more of the outside auditors who are trying to learn more, but overall the biggest growth is from the internal auditors getting more training and understanding about fraud and risk management.”
He advises auditors to look for anomalies in spending patterns that go beyond an employee’s means, and financial ratios that vary from year to year, along with other symptoms of suspicious activity.

Summerford sees a growing need for accountants with fraud examination skills. “If you’re combatting and working against fraud, business is good,” he said. “There’s much more technology that’s available to the fraud fighters. I think that’s probably one of the biggest trends. They’ve had some good programs and some good software and technology, but people are taking more interest in it. As the big companies take more interest in compliance, there’s more technology to look for these red flags and anomalies.”

He said he would like to see the American Institute of CPAs set a standard for analytical reviews using software to look for patterns and symptoms of fraud. “We’ve got the technology, but so many auditors don’t know how to use it and don’t know anything about it,” he said.

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