Young CPAs: We’re looking for a few good forensic accountants
Is accounting “exciting”? When it comes to the different fields of accounting — public, managerial and governmental accounting, to name a few — I’d argue that there’s nothing more exhilarating in the accounting world than forensic accounting. Even the name potentially conjures up scenes from TV shows like "CSI: Crime Scene Investigation" or "Bones" and it’s a fair comparison. Forensic accounting, like forensic pathology, is a discipline, if not a calling, for many universities and business schools that is synonymous with “skeptical” detective work and fraud deterrence.
Many of today’s accounting graduates and soon-to-be CPAs who are considering a future career as a forensic accountant might not know the stepping stones that will vault our next generation of CPAs into the top echelon of practitioners. After nearly 20 years working in professional services, mostly consulting with public and private companies as a forensic accountant, I would like to offer the following practical advice for accounting graduates interested in the forensic accounting field.
Mind your GAAP: A forensic accountant must have both a functional and working knowledge of U.S. GAAP and possibly even International Financial Reporting Standards. You do not need to be an accounting savant who can recite FASB’s Codification from memory. However, you should be able to understand the basic tenets and principles of the FASB Codification, as well as how to use and apply research tools to navigate the body of U.S. GAAP and supporting interpretations. If you know your U.S. GAAP well enough, you will become the “go-to” person in an investigation who can respond when a manager says, “Hey, I have an interview with the corporate controller. Can you look something up?” Also, young and old CPAs alike should strive to stay up to date on timely accounting and financial reporting topics and changes in U.S. GAAP.
Nail the interview: Fact-finding and corroborating interviews are the backbone of many accounting and SEC investigations. Forensic accountants typically become the key members of an investigative engagement team, called upon to assist a company and its legal counsel with prepping for and conducting subject interviews. The forensic accountant must ensure the right questions are posed and answered correctly around technical and financial reporting topics, observations and issues. Often, you will be sitting right beside counsel, engaged in interviews to develop rapport, set cadence, and promote fact finding. There are many excellent courses and teaching opportunities available to hone your interviewing skills — check with your local chapter of the Association of Certified Fraud Examiners (ACFE) to see what’s available in your area.
Practice “professional skepticism”: One of the primary tenets of the CPA ethical code is that a forensic accountant must practice and exercise “professional skepticism.” When do I probe more? When do you probe less and let things develop? When is the right time to ask for more supporting documentation or more information? With experience, the CPA’s “professional skepticism meter” becomes more refined and reliable. In fact, I have observed that forensic accountants who have spent time in a public accounting and assurance environment tend to have a more prominent and defined professional skepticism meter. External financial statement audit and assurance practices are great places to start your young CPA career before transitioning over to forensic accounting, once you’ve accumulated enough professional training, team assignments, client exposure, and other career building blocks.
Don’t fear the client: From your first engagement as an accounting professional, aspiring CPAs should seek out roles that allow you to interact directly with clients. You have spent a great deal of time, money and energy in earning that accounting degree, so have confidence that you are prepared. You might feel intimidated at first, but don’t worry — few clients bite. These client interactions help strengthen your emotional intelligence on using tone and building rapport. The more opportunity to practice your business conversational skills (and apply professional skepticism) through client interaction, the better forensic accountant you will become. Learning to interact productively with client personnel will be extremely important when you someday have to interview wary employees as a CPA investigating a company.
The write stuff: Although accounting is about numbers, every CPA, forensic accountant and business professional should seek to improve their writing skills. Most forensic accounting assignments and investigations will have some form of a final, written report or formal presentation. As a junior forensic accountant, you may be asked (or you might offer) to draft parts of it. Seize the opportunity and showcase your ability to synthesize and present clear and concise facts, observations and findings that bring the results of your engagement into sharp focus. The story behind the allegations and results of your forensic accounting procedures will likely be critical to the end user, whether it’s an audit committee, company management or a regulatory enforcement agency. Companies also may refer to your written work many times as part of engaging in remediation efforts and improving internal controls. Even in you are early in your CPA career, don’t be afraid to raise your hand and take the first crack at that memo or summary — it only builds confidence and sharpens your pencil for a career in forensic accounting.
There are many fine disciplines and practice areas inside the accounting profession, and forensic accounting is just one of them. Wherever you practice or hang your CPA license, you will be successful if you work hard, challenge yourself, and be professional, poised and confident. As you build those skills and if you have the drive to investigate financial malfeasance, consider the possibility of a career in forensic accounting as your future calling.