Free Site Registration


More Debits & Credits Posts

Researcher Foresees Regulation of Forensic Accountants

Print
Email
Reprints
By Michael Cohn
December 14, 2012

A recently published academic paper asks the thorny question, “Should the forensic accounting profession be regulated?”

The paper, by Wm. Dennis Huber, a CPA and certified fraud examiner, at Capella University, discusses whether the forensic accounting profession and the forensic accounting certification industry should be regulated. The paper cites recent studies, including his, that have uncovered significant problems within the forensic accounting profession and the certification industry for forensic accountants.

“The failure of forensic accounting corporations to disclose either their legal status or the qualifications of their officers and directors, their failure to publish financial statements, and their failure to adopt or enforce a Code of Ethics or Standards of Practice, were among the most significant problems uncovered,” said Huber. “The failures of the corporations were exacerbated by forensic accountants’ failure to investigate diligently the corporations that issued their certifications prior to obtaining their certifications. This resulted in a significant number of forensic accountants holding certifications from corporations that were inconsistent with their beliefs that a forensic accounting corporation should be not-for-profit, and their officers and directors should be qualified.”

Huber argues that the forensic accounting certification industry “is characterized not just by strong, competitive forces but also by outright legal conflict between the corporations that issue forensic accounting certifications. The competition can easily be seen in the various self-promotional materials. The conflict, if not outright animosity, is manifested in the legal actions taken by one corporation against another which, while claiming it is to protect the corporation, does little to advance the forensic accounting profession.”

He sees three alternatives for addressing the problems: voluntary action by the corporations that issue the certifications, establishing an independent agency for accrediting the corporations and certifications, and regulatory intervention. He evaluates the feasibility of the various solutions and concludes that the most realistic alternative is for government regulation of forensic accounting in the form of legislation at the state level. It’s not clear that will ever happen, but he raises issues that forensic accountants may need to consider as the audit and tax prep professions face increasing levels of regulation by the PCAOB and the IRS.

0 Comments

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Debits & Credits, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.


Follow Accounting Today
Advertisement


Advertisement

Deloitte’s Efforts at Greater Diversity and Inclusion

April 23, 2014

Deloitte vice chairman and chief inclusion officer Deb DeHaas discusses the firm's efforts at recruiting a more diverse workforce.

Trends in the Accounting Profession

April 18, 2014

Jim Metzler, former AICPA vice president of small firm interests, and founder of Metzler Advisory Group, talks about how the CPA profession is changing.

Lessons in M&A: Client and Staff Retention

April 14, 2014

Transition Advisors president Joel Sinkin talks about what firms should do after a merger to retain their clients and staff members.

Advertisement

SLIDE SHOW

More Taxpayer Misconceptions

April 21, 2014

Apparently, there’s no end to the ridiculous things taxpayers believe.

Dumbest Employee Excuses for Being Late

March 31, 2014

Running a little late could have big repercussions, especially at a firm in the midst of busy season. From escaped zebras to must-see TV, employers told CareerBuilder some of the most memorable excuses they've heard from tardy employees.

Common Taxpayer Misconceptions

March 19, 2014

The NAEA’s collection of ridiculous things tax clients believe.

The 10 Fastest-Growing Firms in the U.S.

March 10, 2014

The firms with the highest 2013 revenue growth in our Top 100 Firms/Regional Leaders list.

Top 10 Tech Trends for 2014

March 3, 2014

As companies gain more affordable access to new technology and platforms, they also seek to make smarter investments.

Advertisement
Advertisement
Advertisement