If you want to know how to become a forensic accountant in the USA then this guide is going to be extremely helpful for you. It consists of information like what a forensic accountant does, what are the steps to become a forensic accountant, what is the job outlook, what are the required skills, etc. All of this information will help you make a firm decision and will help you figure out a path towards becoming a forensic accountant. Before we start discuss who a forensic accountant is and how to be one, let’s see how many types of accountants are there:
Types Of Accountants
There are various types of accountants and some of them include:
- Certified Public Accountant (CPA)
- Management Accountant
- Chartered Accountant (CA)
- Tax Examiner
Certified Public Accountant (CPA)
A CPA is responsible to make sure that all businesses and individuals follow the generally accepted accounting principle (GAAP), accounting principles, standards and all the procedures issued by the Financial Accounting Standards Board (FASB). These professionals are responsible for performing various tasks including accounting tasks, tax preparation, financial planning, audits, etc. They have the liberty to focus on an area of their choice as well.
Management accountants are responsible to help companies perform better by identifying, analyzing, interpreting and communicating important information to managers. They also prepare data by forecasting budget, cash flow and rate of return of short and long term projects. Management accountants also help the senior management in making financial decisions.
Chartered Accountant (CA)
There are four areas within the accountancy field that CAs focus on. These areas include taxation, applied finance, financial accounting and reporting, and management accounting.
An auditor is a professional who is responsible for examining financial records to make sure that they are accurate and they comply with tax laws, regulations and other accounting standards. They also protect businesses from fraud, point out discrepancies and provide guidance.
A tax examiner reviews local, state and federal tax returns filed by individuals as well as small businesses. They check how much they owe in tax and then collect it on the behalf of the government.
What Does A Forensic Accountant Do?
Forensic accountants are usually hired at insurance companies, government agencies, public accounting firms and banks. They use their analytical and accounting skills to investigate the financial transactions of a business or an individual. Many professionals also develop computer applications to keep the information in an organized way. These applications help them deliver the information to the clients as well. Since forensic accounting is useful in legal proceedings, forensic accountants’ could give expert advice in this matter as well. These professionals also work as CPAs and fraud examiners. Some of their duties include:
- Forensic accountants analyze and interpret business and financial records to find out their importance and accuracy.
- Forensic accountants uncover financial crimes and investigate fraud.
- These professionals also work as a part of law enforcement and conduct criminal investigations to uncover illegal financial transactions.
- Forensic accountants also look at public information (such as Facebook or Instagram) which may help in backing up numbers that do not add up.
Steps To Become A Forensic Accountant
In order to become a forensic accountant, following are some of the steps that one should follow:
Candidates are required to get enrolled in an accounting program to secure an entry level position. Choosing the right program and completing it may take months and years. When you are evaluating programs, aspiring candidates should look for schools that offer a forensic accounting concentration or electives in forensic accounting.
While completing their bachelor’s program, students are suggested to take as many forensic accounting courses as possible. Learners should also choose programs that allow them to major in the field.
A bachelor’s degree requires 4 years to complete. During this time, students complete accounting major requirements and general education coursework. After completing the 4-year program, graduates become eligible for entry level positions in the field of accounting.
Even though getting a master’s degree is not necessary as a bachelor’s degree meets the requirements for most entry level jobs. However, earning a master’s degree may be beneficial as some employers prefer hiring employees with a master’s degree. A master’s degree is a 2-year program which helps students in gaining advanced skills.
Once you have a bachelor’s or master’s degree, you can start looking for forensic accounting jobs. Doing an internship during your academic years can also help you during your job hunting period.
A certified forensic accountant has the ability to demonstrate high level skills in the field. Forensic accounting certifications require candidates to pass several exams which may take months to complete.
Skills Required To Become A Forensic Accountant
A forensic accountant is required to have the following skills:
Detail Oriented Approach
A forensic accountant should be detail oriented so that he can easily figure out discrepancies even if they are minor.
Strong Investigative And Analytical Abilities.
Strong investigative and analytical abilities help forensic accountants throughout the process of reviewing documents and numbers. It also helps them when they are interviewing people.
Forensic accountants should be able to communicate clearly whether it is a written or oral form of communication. They may work closely with court officials or law enforcement which means they need to communicate clearly. Along with this, he or she must also have a thorough understanding of legal and accounting knowledge as they are usually called as an expert witness during trials.
Problem Solving Approach And Creative Thinking
It is essential for a forensic accountant to be a good problem-solver. Since the course of a case keeps changing with evidence, these professionals should be creative enough to think of different scenarios and possibilities.
How Much Does A Forensic Accountant Make?
Forensic accountants are highly demanded throughout the country. According to the US Bureau of Labor Statistics, the median annual wage of auditors and accountants was $73,560 in 2020. Most of these professionals work full time and are expected to work longer hours at certain times of the year which include tax season and quarterly audits. Top paying industries for accountants include finance and insurance, management of companies and enterprises, tax preparation, bookkeeping, payroll services, etc.
Job Outlook For Forensic Accountants
As per the US Bureau of Labor Statistics, employment of accountants and auditors is expected to grow 7% from 2020 to 2030. Around 135,000 job vacancies are projected every year on average. Most of these result as many people exit the labor force, like retirement, or switch to some other occupation.