Accounting isn’t widely known as a glamorous career. But one specialized area of accounting combines accounting and detective work that focuses on investigation and litigation.
Forensic accountants are typically employed by public accounting firms, lawyers, law enforcement agencies, financial institutions, insurance companies and government agencies, such as the FBI.
They use their sleuthing skills to conduct financial investigations for cases involving crooked business owners, terrorists, spies and other types of criminals. Most often, they examine financial records of individuals and corporations to find missing money or determine if laws have been broken.
What Forensic Accountants Do
A forensic accountant might be called upon to help with an investigation of a bookkeeper at a private firm when the owner suspects embezzlement. Or, they might assist in cases of divorce, bankruptcy or business valuation. They also follow the paper trails left by individuals and groups believed to be participating in suspicious or illegal activity.
Specific job responsibilities for forensic accountants include:
- Conducting financial analysis, gathering evidence and preparing related search warrants
- Performing forensic research and identifying assets for recovery
- Recording their findings in financial investigative reports
- Identifying funding sources and tracing related transactions
- Meeting and strategizing with prosecutors, law enforcement, insurance company investigators and other stakeholders in a case
- Preparing data for litigation and testifying in court
Celebrated Forensic Accounting Cases
Forensic accountants have been involved in a number of famous cases throughout the 20th century, including the capture and conviction of renowned Chicago gangster Al Capone. Capone was notorious for illegal activities, including bootlegging, embezzlement, gambling and prostitution, but he was eventually sent to prison for tax evasion – thanks to investigative work by forensic accountants with the Department of the Treasury and the IRS Special Intelligence Unit.
When the families of Nicole Brown Simpson and Ron Goldman filed suit against O.J. Simpson who claimed he was broke, forensic accountants used their detective skills to track down millions he had hidden away.
A lesser-known but important case in California involved a trash company that requested approval to charge its customers higher rates. When something didn’t quite seem right, forensic accountants were brought in.
The accountants felt the owners were hiding something – and they were right. Their investigation discovered the owner was siphoning money from the trash company to a personal bank account. Using the paper trail created by the forensic accountants, the Sanitary District filed a civil lawsuit, and the agency was subsequently awarded a $9 million judgment. The investigation also found that the Sanitary District’s own accountants were negligent for failing to find the fraud.
FBI forensic accountants have been instrumental in closing complex cases, such as a $200 million Medicare fraud case, the largest hedge fund insider-trading plot in history and a $200 million case against executives of an Indiana financial firm.
Accountant Salary and Job Outlook
More than 1 million accountants and auditors were employed nationwide as of May 2016, according to the U.S. Bureau of Labor Statistics (BLS). Their median annual salary was $$68,150, while the top 10% earned more than $120,910.
The BLS reports that employment of accountants and auditors is expected to grow by 11% through 2024, which is faster than the average rate projected for all occupations over the same period. Growth will occur as the U.S. economy expands, the BLS said. Also, tougher laws and regulations in the financial sector will also spur demand for these professionals.
Accountants and auditors with professional credentials, such as Certified Public Accountant, should have the best job prospects, as will those with advanced degrees, the BLS said.
Because salary potential and job opportunities may vary according to geographical location, experience, education and other factors, prospective students are encouraged to conduct independent research to determine actual earning and employment potential.