Current challenges of forensic accounting profession

Forensic accounting profession is a specialized area for accountants. Forensic accountants are considered as the elite group of accountants who have further developed their accounting, auditing, legal, investigations, dispute resolution skills and of course technology knowledge to work in a digitally driven business environment.

Forensic accountants are financial detectives who perform their work sifting through various accounting records to try to identify clues, primarily related to fraud. Anyone engaged in this kind of work would likely work in conjunction with legal and law enforcement community, though could be hired by a company to detect fraudulent activity and fraudulent behaviors among employees. In today’s corporate world, most of the frauds are perpetrated by the employees of organisations rather than outsiders. Even when outsiders perpetrate frauds, that’s done with the support of insiders according to many survey findings.

Historically forensic accountants were primarily helping organisations to identify frauds and collecting evidence to identify the perpetrators. However, in today’s context they are also engineering mechanism to reduce the possibility of fraud from being perpetrated against organisations in to order to save financial resources of companies and help creating an ethical workplace where people feel happy to work.

While there is a great deal of demand for forensic accountants and related services at the moment, an equal amount of confusion exist as to who this elite group of accountants are ? Therefore, i thought of going back to basics to describe the attributes of forensic accounting professionals in addition to having the educational knowledge and the required experience.

Analytical mind

Essentially, being analytical means you are good at breaking problems down into smaller parts in order to find a solution. To be analytical requires focus and brainpower. Though you can improve your analytical skills with practice, you really need certain level natural ability in order to succeed in this profession. Issues encountered by you while working in this field are likely to be large and complicated because perpetrators try to hide the existence and prevent discovery of the financial crimes perpetrated by them.

Attention to detail

A good forensic accountant needs to have a desire to dig deeper when they are presented with complicated issues. People come to them seeking their assistance to find the iceberg when only the tip of the iceberg is visible. It is very hard to learn how to be detail-oriented unless you have the inner desire to do it, it is an attitude rather than a skills that could be easily developed, At its essence, this means you need to be able to smell the beneath the obvious clues to uncover the issues. A forensic accountant should be efficient, super-organized, and not willing to accept anything less than a perfect result. As can be imagined, due to the volume of information and different data sources that have to be looked at when working on forensic engagements, this career would not be suitable for someone who is unorganized or makes no use of systems to ensure important pieces of information do not slip through the cracks.

Possess good work ethics

Generally society demands an ethical compass from its law enforcement, the same is true for anyone who works in the forensic accounting profession. When your main task is collecting evidence to identify those who have committed crimes, obviously, you yourself need a strict code of morals and ethics. This is one area where you probably not take for granted. And if you develop a reputation as a forensic accountant that you can not be trusted to do the right thing, you will not be getting anything.

Being inquisitive

It is a reality of human nature that some people have the ability to meander through life and never spend a moment’s time in reflective curiosity about things they encounter during their working day. Such a person will not make a good forensic accountant. On the other hand, if you can not stand to leave a good puzzle unsolved and find yourself frequently wondering why this is or how that came to be, you will make a great forensic accountant.

Being intuitive

It would be nice if all you needed to be a success in this field were the previous four characteristics; however, that would not be true. We are not able to ignore the very important thing called intuition, which distinguishes a good consultants from a substandard professionals. Intuition is the ability to make logical leaps without conscious reasoning, taking in disparate pieces of information and automatically making connections.

Today’s challenge

However, like anything else in the current environment, there is an influx of people in to the forensic profession since it is an attractive and profession in demand at the moment. Question to ask is whether all of them meet the requirements mentioned above ? or at-least what percentage of them meeting the requirements to be recognised as effective forensic professionals? There is no clear answer.

There is a great misunderstanding amongst professionals that anyone can become a forensic accountants as long as they have completed a certification program; and unfortunately, there are also significant number of forensic related certification that are ” short courses” which could not produce a seasoned professionals in forensic accounting. As a result, clients, employers are not able to receive the true forensic flavour from these forensic accountants when working with them.

There is also tendency of professionals moving to the forensic accounting field without inquiring themselves whether they are fit for that profession. when unfit people are tasked with forensic jobs, the real results are not experienced by the people who employ them as employees or consultants. When they are not able to solve the much anticipated problem by the people who employ them, the trust and confidence in the profession erodes in the mindset of the users of the service of the forensic accountants.

This situation is exactly like the situation in the ” big data” world where anyone could call themselves as ” data scientist”. However, the intended results were not achieved by the users even to date though there has been a much hype in these areas.

We as consultants are partly responsible for creating this situation as well. Since the area is a potential area of business growth, we started investing in people without giving enough attention to the attributes required and relying just on the paper qualifications. At the end, our clients did not receive the expected value addition from the use of forensic accountants. When the expectations are not met, naturally the demand and reputation of the profession gets negatively affected.

However, the time has come to look back our past practices and remedy the past issues and create a better forensic accounting profession.