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When most people think of the accounting profession, they inevitably think of “number crunchers.” The profession is all too often perceived to be simply involved with determining corporate losses, calculating profits, and determining whether or not a given investment makes sense under certain conditions. Those responsibilities are all central to certified public accounting, but they’re generally not what makes up the forensic accounting profession. There are some key differences between these two fields that just might change the broader view of what accounting means.
Finding Fraud: The Accountant as Investigator
Whenever the word “forensic” is used in conjunction with another occupation, the chances are pretty good that a person in that role is responsible for performing detective work at some level. That’s certainly true of the forensic accounting profession, where accountants are actually charged with keeping businesses honest or investigating those that regulatory officials think might be far from it. Accountants who seek a role in forensic work will actually put their number-crunching skills to use as an investigator, going through company records and looking for irregularities that indicate abuse of loopholes, tax fraud, or other kinds of scandalous activities designed to manipulate the books.
When they find what they believe might be a serious abuse of the company’s monetary policy or a serious manipulation of the company’s records, they’ll document those things and then test their theory about the numbers. They’ll look for irregularities in calculations over time, trying to identify patterns and ruling out the possibility that inaccurate books were the result of a simple mistake or oversight.
The Chain of Command: Who Certified Accountants Usually Report To
There are certainly a large number of forensic accounting firms that perform work on their own, often when they’re hired by corporations or other types of firms. This is perhaps a very small part of where most forensic accountants actually work, however. Instead of working for private firms, most people on the forensic side of the profession prefer to work with government agencies or in-house for large corporations.
To that end, most forensic accountants answer to regulatory bodies and investigative agencies operated by federal or state governments. Their job is often to look for deliberate abuses of government policy, whether it’s blatant abuse of the tax code or squirreling money away in foreign accounts to avoid certain fiscal burdens.
Where forensic accountants work in large corporate environments, they often serve as the company’s “double-check” for accounting numbers and policies. They’ll often be in a supervisor position charged with managing many certified public accountants. In this capacity, they’ll review the books on a regular basis and look for theft, deliberate abuses, oversights, or other problems. They’ll then report directly to the company’s executive financial leadership in the event of any problems.
A Growing Profession in a World of Big Business
Forensic accounting is relatively new, and it’s a fast-growing field in a world where corporations seem to be getting bigger and the use of tax loopholes seems to have gone mainstream. With responsibilities that range from fraud detection to corporate accounting oversight, those who specialize in both accounting and investigative work will find themselves in high demand.
Furthermore, they’ll often find themselves being the first line of defense against wider corporate problems that could lead to serious economic consequences in the broader economy. That’s a serious responsibility and one that explains why so many accountants view this particular field as a natural method of career advancement.