Forensic accountants are known as the “bloodhounds” of the finance industry. But what exactly is forensic accounting and what value does it bring to the financial services arena?
We provide the answers and offer additional insights into the world of forensic accounting.
What is a forensic accountant?
Forensic accountants are specialists. When you get sick with the flu you go to a general practitioner, but when you break your leg badly you go to a specialist, i.e. an orthopaedic surgeon. In the same way, when you have a normal set of financial statements you want audited, presented and prepared for tax returns you go to an accountant; however, when you suspect misbehaviour, the possibility of fraud or something requiring more specific investigation your port of call will be a forensic accountant.
Financial forensics and fraud investigation
As specialists in fraud detection and prevention, forensic accountants concentrate on a specific area of financial statements and they study and investigate that specific area in detail.
Like accountants, forensic accountants know, understand and can apply the general accounting principles (tax, VAT, auditing, and so on) and can make assertions used in financial accounting. However, what makes them different is that together with these financial accounting and auditing skills, they also have the skills to detect, investigate and report within their specific field of expertise. They are also suitably qualified to advise on preventative measures. Their vast experience and specialised skill set sets them apart and also qualifies them to testify in court.
How forensic accounting works
Forensic accountants want to know WHAT happened, WHY and HOW it happened?
They are tenacious and have an inbuilt drive to drill down to the true facts of a matter. They derive great satisfaction in figuring out the details. It is not an occupation for those sprouting personal opinion, wanting to get something done quickly or approaching a matter with pre-conceived ideas; it is an occupation driven by giving painstaking attention to the minutia – the small, often unseen, details – and how these details can eventually be used to tell a story. It is a very ‘paper-heavy’ occupation, with a large focus on the data – reading, investigation, research and writing of reports. Little time is spent with people. Something to keep in mind if you are considering a career in this field!
Forensic accountant qualifications
Experience is key in the role of the forensic accountant. As qualified accountants, they have a B Com (Accounting) degree or are chartered accountants (SA), or both; they have practical on-the-job experience and have completed additional courses and training, such as the Institute of Commercial Forensic Practitioners (ICFP) and (AFCP) certificates, as well as short courses on interview techniques and various other soft skills. Forensic accountants learn the different tricks of the trade early on and are exposed to and understand the legal system in relative detail, often working with lawyers and even police on various matters.
The North-West University in Potchefstroom is the only institution that offers a Forensic Accountancy degree in South Africa at present. The knowledge and skill set required to become a forensic accountant is more commonly built up over time and with the successful completion of various courses and on-the-job training. A forensic accountant’s unique skill set enables them to expand their services beyond fraud detection and prevention, to include consulting work, business valuation, dispute resolution, analysis of data, calculation of loss of profit damages and accounting.
At Grid Forensic Accounting, we offer a number of financial and forensic services to legal, business and personal entities. To find out how we can assist you, visit our services page, or contact us for a free consultation.
To secure the services of a bloodhound, contact Grid Forensic Accounting, today.