What Is Forensic Accounting? (Education, Careers, and More)

Written by Coursera Staff • Updated on

Learn more about forensic accounting and the necessary skills and education needed to become a forensic accountant. In this article, determine whether this career path is for you.

[Featured Image] A forensic accountant is going over an investigation in their library.

Forensic accounting is a branch of accounting dealing with detecting and preventing financial crimes. As a forensic accountant, prepare to use competencies in accounting, auditing, and investigative techniques to detect and analyze cases of fraud and other financial crimes. 

In 2023, the Canadian Anti-Fraud Centre received reports of losses of $530 million CAD, an increase of $150 million CAD more than in 2022 [1]. Explore how forensic accountants use their investigatory and analytical skills to identify different types of financial crime to get a feel for the job and if it aligns with your skills and interests.

What areas do forensic accountants work in?

Forensic accountants investigate fraud, embezzlement, and other white-collar crimes. As businesses become more complex, so will their financial investigations. Often, forensic accountants present accounting analysis and evidence in a trial or business-related issues. In this role, you could work in one or several of the following areas: 

  • Business economic losses and bankruptcy: Expect to collaborate with businesses, creditors, and bankruptcy trustees to investigate possible fraud or mismanagement of assets in business bankruptcies or other situations involving economic losses. 

  • Family and marital disputes: Liaise with attorneys and clients to investigate cases of possible fraud or misappropriation of assets in divorce or other family disputes. 

  • Hidden or misappropriated assets: Forensic accountants may look for assets transferred or concealed by an individual or business. 

  • Insurance claims: Work to investigate the claims to determine their validity.

  • Money laundering: If you identify a financial crime, you may pass on details to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which is primarily responsible for anti-laundering efforts within Canada.

  • Tax fraud: Work with the Canada Revenue Agency (CRA) by reporting potential tax fraud to their Leads Program.

Forensic accounting audit procedures

An organization's financial statements provide an overview of its financial health. However, these statements may uncover only some of the story. In these cases, a forensic accountant may perform an investigation. The following offers a glimpse of the typical process of a forensic accounting audit:

1. Investigation

The first step in a forensic accounting investigation is gathering all relevant information. This includes financial statements, tax returns, bank records, and any other documents that could provide information. With all the necessary data in hand, it is time to start investigating the numbers. This phase aims to identify any irregularities that could indicate fraud or wrongdoing.

2. Reporting

Once the investigation is complete, forensic accountants report findings to the client. Depending on the nature of the case, they may also share these findings with law enforcement or other regulatory agencies. 

3. Litigation

In some cases, the findings of a forensic accounting investigation can lead to litigation. In such cases, you might provide expert testimony or support during the trial.

How to become a forensic accountant

It’s essential to earn a bachelor’s degree in a related field when considering a career in forensic accounting. You will also need to gain professional experience, earn the CPA, and consider additional credentials such as certifications.  Forensic accounting is a rapidly growing field that offers many opportunities for those with the right skills and forensic accounting education.

Get a relevant undergraduate degree

A few different types of degrees can lead to a career in forensic accounting. Getting a bachelor's degree in accounting, finance, economics, or statistics and successfully completing the Certified Public Accountant (CPA) exam can get you on your way. However, employers may also prefer candidates with a master’s degree, making it a valuable way to help set yourself apart from other applicants and enhance your knowledge. 

Gain professional experience 

After earning a bachelor’s or master’s degree, apply for entry-level accounting positions to get hands-on experience to help prepare you for the certified public accountant (CPA) licensure.

Remember that a forensic accountant is not an entry-level position, so employers may expect candidates to have practical experience in the field.  Searching for job openings online, through commercial job sites, and local or federal government websites can help. 

Earn your CPA

Many forensic accountants opt to earn a certified public accountant (CPA) designation. The certification requirements for becoming a CPA vary from province to province but generally involve passing an exam demonstrating mastery of technical skills, having at least a bachelor's degree, and meeting experience requirements. 

Earn the Certified in Financial Fraud (CFF) credential.

While only optional, earning the CFF credential helps CPAs specializing in forensic accounting validate their experience and knowledge. It requires significant expertise, skills, and knowledge within forensic accounting. To earn this credential, you must complete 75 hours of professional development in forensic accounting, pass an exam, and have 1,000 hours of relevant work experience. 

What skills do I need to become a forensic accountant? 

Prospective forensic accountants need to develop high-level skills in accounting, auditing, and investigative techniques. Forensic accounting is an advanced form of accounting that focuses on investigating financial crimes. A blend of technical and workplace skills is a must to become a forensic accountant.

Technical skills

Forensic accountants need technical skills in accounting, finance, and information technology. The following represents essential abilities you’ll need to master to understand financial statements and transactions, use accounting software, and reconstruct financial data:

  • Able to operate accounting software

  • Able to analyze financial documents

  • Know how to conduct technical interviews for witnesses or suspects

  • Have legal knowledge to review documents 

  • Ability to analyze data to identify trends 

  • Ability to conduct internal audits 

Workplace skills

To become a forensic accountant, you must also take time to develop various workplace skills to handle data and present findings. Some essential skills to have as a forensic accountant include:

  • Critical thinking

  • Detail-oriented

  • Excellent communication

  • Analytical thinking

Is forensic accounting right for you?

Getting qualified as a forensic accountant takes time, so it's important to assess individual interests and define career goals before jumping into this career. Reflecting on these details helps determine if forensic accounting is the right career path. Consider the following questions:

  • Do you have an interest in finance and accounting? 

  • Do you enjoy working with numbers and solving complex problems? 

  • Are you interested in crime and learning the ins and outs of the law?

Answering the following questions will help narrow your career path and decide the next steps in your career.

  • Do you want to work for a government agency or a private company? 

  • Do you want to specialize in a particular area of forensic accounting? 

Job titles of forensic accountants

Explore the variety of jobs in forensic accountancy when embarking on this career path. Consider these job titles of forensic accountants and their annual CAD base salaries to explore your potential earnings: 

  • Forensic auditor: $63,308 CAD [2]

  • Financial investigator: $68,305 CAD [3]

  • Fraud examiner: $55,878 CAD [4]

  • Fraud investigator: $54,834 CAD [5]

  • Senior forensic accountant: $69,368 CAD [6]

  • Forensic accounting senior associate: $68,730 CAD [7]

Think about  some other job roles that overlap with forensic accounting when considering other job titles in the field: 

  • Litigation support specialist: $50,151 CAD [8]

  • Financial analyst: $64,845 CAD [9]

  • Anti-money laundering analyst: $59,824 CAD [10]

  • Asset recovery specialist: $42,467 CAD [11]

  • Fraud prevention specialist: $43,978 CAD [12]

Continue learning about forensic accounting on Coursera

Forensic accounting is a complex and ever-changing field, so gaining specialist knowledge and keeping up with the latest developments can help you remain competitive. Consider leveraging the benefits of online courses to gain the entry-level forensic accounting skills and knowledge necessary to build upon an accountancy degree and start a career in this field. 

For example, the Forensic Accounting and Fraud Examination Professional Certificate offered by West Virginia University can provide an excellent starting point. After completing the program, you’ll better understand different types of fraud and some of the latest tools you can use to detect them. 

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Article sources

1

Royal Canadian Mounted Police. “Fraud Prevention Month 2023: Fraud losses in Canada reach another historic level, https://www.rcmp-grc.gc.ca/en/news/2023/fraud-prevention-month-2023-fraud-losses-canada-reach-historic-level.” Accessed September 15, 2024. 

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