Careers and Insights for Forensic Accounting

Hey guys! Hope you have liked the content provided in previous two blogs. We are here again with some funny but informative insights and facts.

1) It's not James Bond, yet it's still quite cool. 

Before you start imagining storming crime scenes like James Bond, let’s know what forensic accounting is. Forensic accountants focus on situations where litigation is involved. Forensic accountants will often be called to give expert evidence in support of a trial. Almost every major accounting firm will have a team specializing in this field to address areas like insurance claims, personal injury claims, fraud, anti-money laundering, construction, or royalty audits. Forensic accountants will either act as investigators themselves or perform due diligence of other professionals to ensure everything was done properly.

Forensic Accountants focus on situations where litigation is involved.

2) It's as much about helping individuals comprehend as it is researching. 

There are some key differences to highlight between the role of forensic accountants and internal accountants. While internal accountants often work amongst colleagues who understand accounting phrases, forensic accounts translate complex financial data into information a layperson can work with. They also need to convey the findings to the court by simplifying the matter. This means forensic accountants need to have a diverse business knowledge to make the information easy for a prosecutor, judge, or jury to understand.

3) You need extraordinary training and some uncommon accreditations and aptitudes. 

The educational experience for forensic accountants differs from traditional accountants. On top of a bachelor’s degree in finance, or a related field, professionals often take on additional education in criminal justice or law enforcement. In addition to a CPA, forensic accountants often become a Certified Fraud Examiner (CFE) to get a leg up on their peers. So, to get all these professional degrees, you must need to have a lots and lots of knowledge and skills.

4) The cash, It's here.

With all the additional experience and education, you need to become a forensic accountant, it’s good to know the job comes with extra salary. According to the Association of Certified Fraud Examiners, forensic accountants are earning anywhere from $85,000 without a CFE to $104,000 with a CFE per annum in the US. There’s even a salary calculator to help you understand what you could make upon entering the field. Couple that with the job security and forensic accounting is a field that is attracting a lot of attention.

People in India often say that the pay for CAs and CMAs are great, but only few know that CFEs also earn a lot.

5) Forensic bookkeeping is incredible for independent work. 

Forensic accounting can be a great way to supplement your income or become self-employed. If you have the experience required and you are able to build relationships in your community, you’ll quickly find high-paying contract jobs are available with forensic accounting. In this role, you’ll appear in court for a few hours and present analysis that you’ve completed. The money involved with these projects varies, but on a per-hour basis it is likely to be significantly higher than your day-to-day job.

So, with these facts presented above we just wanted you to know that there is a great future ahead as a Forensic Accountants with a high-pay job.

"India is witnessing good demand for forensic auditors. More than the theoretical knowledge, practical application and exposure is more important, if you want to scale up in forensic audit" - V Kandaswamy,CA

Recent developments in forensic accounting:

Extortion has constantly kept budgetary administrators watchful, yet the substances of a super-quick computerized age overflowing with programmers and digital robbery have upped the ante more than ever. Today, with the rash of cybercrimes being committed against every business connected to the Internet, the nature of forensic practice is poised to expand into new territory. It significantly manages extortion and fraudulent activities in insurance claims, amalgamation and mergers, cushy wrongdoings.

Forensic accounting and auditing started in India with the inception of India forensic in the year 2005. In past four years India forensic have endeavored in building the community of forensic accountants.

Formation of SFIO- Serious fraud investigation office (2003) under the jurisdiction of government of India is involved in major fraud probes and is the co-ordinates with the agencies like the Income Tax and CBI. Section 211 and 212 of the Companies Act 2013 deals with the Establishment of Serious Fraud Investigation Office.

Section 177 of companies act, 2013 talks about the cases where the auditor of the company finds out any malpractices and fraud by management, they have to report it to central government within prescribed time. He needs to start investigation of the fraud. 

RBI recommends that, from the operational point of view, banks may take certain measures to ensure effective quick investigation, monitoring and follow up of frauds by improving the quality of investigation.

Today, India forensic is brand spread across in 5 countries, 69 corporate brands and 600 members. In past three years India Forensic has conducted numerous programs on forensic accounting and auditing in the cities like Mumbai, Pune, Bangalore and Hyderabad.

CFE: Certified Fraud Examiner

Certified Fraud Examiner (CFE) membership is open to Associate members who are interested in taking their career to the next level by earning the standard of professional excellence in the anti-fraud profession. The CFE credential is increasingly being designated as a preferred credential in the hiring practices of businesses, government entities and law enforcement agencies.

Case Study

SITUATION

The Los Angeles Unified School District (LAUSD) is the second largest school district in the country with an annual budget in excess of $11 billion.  Mired with problems and a price tag estimated over $200 million, the LAUSD hired FSS to determine the sources and uses of funds for the Belmont Learning Center project.

The construction of the Belmont Learning Center on an old abandoned oil field raised questions about the site selection process.  These questions turned to public outrage when construction was halted on the project when it was 60 percent complete, due to the risks associated with methane gas that was discovered on the project site.

STRATEGY

Achieving fast results was critical given the daily media barrage focused on this high-profile project and the size of the expenditures.  The initial FSS assessment of the accounting processes identified multiple disparate sets of accounting records – some electronic, some manual.  Using advanced data analytics we normalized millions of transactions into a single platform for analysis.  Next, advanced data mining techniques were employed to quickly and efficiently uncover a range of abusive activities and lapses in financial controls from millions of lines of transactional data.

RESULTS

The FSS investigation revealed site selection process was only one of many problems caused by management of the Belmont Learning Center project. Those included conflicts of interest, fictitious vendors, duplicate payments and widespread violations of competitive bidding policies throughout the District.  FSS assisted the inspector general in naming individuals responsible for abuse, as well as making criminal referrals for those responsible for malfeasance.

Additional findings:

• Overbilling of $2.1 million.
• Improper payments and overpayment of contracts resulting from the override of system controls.
• Circumventing bidding processes, contract limits and system controls that resulted in over $71 million of vendor payments paid through miscellaneous vendor codes
• Budget transfers of $49,999 on 48 separate occasions over four months circumventing fund transfer policies, which required Board of Education approval for any spending greater than $50,000.
• Circumvention of payment code requirements by making direct payments to vendors which resulted in outstanding encumbrances of over $77.8 million.

For More, Visit: https://www.forensicstrategic.com/case-studies

Note for our readers:-

We have thoroughly enjoyed bringing you the content related to forensic accounting every week, like they say, as we learn, we grow, and your constant support has been the biggest factor of motivation for us. We sincerely thank you for being a loyal reader of our blog and hope to keep up this enduring bond.

References:-

https://www.acfe.com/cfe-membership.aspx

https://www.bajajfinserv.in/insights/what-makes-forensic-accounting-a-coveted-career-option-for-cas

https://study.com/articles/How_to_Become_a_Certified_Financial_Examiner.html

https://www.quora.com/What-is-the-scope-of-Forensic-Accounting-in-India

https://www.forensicstrategic.com