List of Top 3 Careers in Forensic Accounting
Below are some of the forensic accounting career/job roles for people pursuing finance.
Overview of Forensic Accounting Careers
Financial statement frauds keep recurring from time to time. Be it Enron or Lehman Brothers, all have a major impact on the economy. In addition, there are regular reports of such frauds in the financial press and the press releases section on the SEC’s website.
Forensic analytics is described as an act of obtaining and analyzing electronic data using formulas and statistical techniques to reconstruct, detect, or otherwise support a claim for financial fraud. Forensic accounting and analytics are also used to detect accounting errorsAccounting ErrorsAccounting errors refer to the typical mistakes made unintentionally while recording and posting accounting entries. These mistakes should not be considered fraudulent behaviour first-hand as this can happen with anyone and by anyone. such as under-billing or overpayments.
It is not easy to define a forensic accountingForensic AccountingForensic accounting employs a mix of accounting, auditing, and investigative acumen by recording accounting documents, preparing reports, and performing financial analysis for use in legal proceedings. Thus, it provides an accounting analysis from a litigation perspective. job. Professionals like CPAs also struggle while understanding this role. In the United States, it is mandatory to obtain a license from a reputed institute to practice as a forensic professional.
Since the United States has the federal government, every state has its own set of rules and policies which all forensic professionals are expected to follow. Forensic accounting means “to apply specialized skills to collect, analyze, and evaluate data, both financially and economically, then communicate the findings to the management.” As per one of the experts, forensic accounting is both art and science.
Nowadays, many opportunities have evolved in such jobs. Below are a few profiles related to forensic accounting career path:
Career #1 – Accountant
An accountant is a master in preparing books of accounts and is responsible for maintaining proper accounting records with suitable disclosures needed as per the statute. Their main responsibility is to present the correct picture of the company in the form of financial statementsForm Of Financial StatementsFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels., i.e., balance sheet and profit and loss account.
They are also the process owners of the finance department, which makes them solely responsible for maintaining the utmost integrity in financial transactions without undertaking any window dressingWindow DressingWindow dressing in accounting refers to the intentional manipulation of financial statements by company management in order to present a more favourable picture of the company to users of the financial statement before it is released to the public. or over/understating the transactions.
The major responsibilities of an AccountantResponsibilities Of An AccountantResponsibilities of an accountant include documenting accounting information so as to ensure that public trust and interest of all the related stakeholders are preserved. are:
- To keep the company financially organized.
- To maintain budgetary allocations.
- To monitor the expenses and analyze the differences by following standard costingStandard CostingStandard cost is an estimated cost determined by the company for the production of the goods and services or for performing an operation under normal circumstances and are derived by the company from the historical analysis of the data or from the time and the motion studies. techniques.
- To keep the financials of the company clean and compliant.
- Knowledge of MS Excel.
- Knowledge of US GAAP and IFRS.
- Monthly and quarterly book closure.
- Consolidation of financials with other subsidiaries and parent companies.
Top Hiring Companies
In the U.S. the top companies hiring a senior accountant are consultancy firms and companies like EY, KPMG, PriceWaterHouseCoopers, Baker Tilly Virchow Krause LLP, Clifton Larsen Allen, etc.
The average salary of a Senior AccountantSenior AccountantA senior accountant is responsible for reporting costs, expenditure, profitability, margins and performs the lead accounting role in the organization. Their duties are more than a junior accountant, which included data compilation, journal entries, and populating balance sheets. in the United States is around $51,000 to $88,000.
- Fresher senior accountants can earn around $58,000.
- 1 to 5 years of experience can earn up to $63,000.
- 6-10 years of experience can earn up to $67,000.
- 11-20 years of experience can earn up to $69,000 plus incentives and targets based on operating margin.
- A controller (senior accountant with more than 20 years of experience) can earn up to $88,000 plus incentives and perquisites.
- Should have a master’s degree in accounting.
- CPA with a Bachelor’s degree also gives a better flavor to their career.
- Based on the experience of the accountant’s role, a person can grow and pursue a future career as accounting manager, financial controller, and corporate controller.
- As the senior accountant/controller has full access to the accounts of an entity, there are possibilities that they might indulge in ill practices of cooking books of accounts, which may lead to financial scams like the one in Enron. Therefore, senior accountants should be highly ethical and carry out their work with the utmost integrity.
Career #2 – Financial Analyst
The 21st century is the age of information. A person having information can rule the world. Nowadays, everyone has access to data, raw or processed. Therefore, there is a need for data scientists who can understand the data, arrange it and try to obtain the information from it, which will help bring strategic decisions. Data scientists are none other than financial data analysts. They are experts in reading data, evaluating it, and identifying any anomalies, which can help organizations save millions of dollars.
The major responsibilities of financial analysts are:
- Data mining and data cleaning.
- Using various analysis skills to identify unwanted occurrences.
- Handling the company’s data and analyzing it from statistical, economic, and financial viewpoints.
Top Hiring Companies
In the United States, the top companies that hire financial analysts are Amazon.com Inc, Lockheed Martin Corp, Johnson & Johnson, Bank of America Corp, Intel Corp, Verizon Communications.
The average salary of financial analysts in the United States is around $65,000 to $93,000.
- Knowledge of Tableau, R.
- Knowledge of various analytical techniques under statistics and Python.
- Good analytical and forecasting skills.
- A fresher financial analyst can earn up to $69,000.
- 1-5 years of experience can earn up to $74,000.
- 6-10 years of experience can earn up to $80,000.
- 11-20 years of experience can earn up to $84,000.
Experienced analysts (chief controller or chief analyst) directly report to the company’s president and stand a chance to become the president themselves can earn up to $89,000 plus incentives and perquisites.
- Master’s degree in accounting.
- Bachelor’s degree with certificate courses in data analytics and data crunching.
- A financial analyst is the key data observer of the company. Corporates with a large customer base require data related to consumption patterns, expenditure patterns, geo-location-wise demand and supply of goods and services, etc. All this can be obtained by using appropriate techniques of the analysis.
- However, using techniques with preconceived notions might not give fruitful or desired results.
Career #3 – Financial Fraud Investigator
The financial marketFinancial MarketThe term "financial market" refers to the marketplace where activities such as the creation and trading of various financial assets such as bonds, stocks, commodities, currencies, and derivatives take place. It provides a platform for sellers and buyers to interact and trade at a price determined by market forces. always fears facing financial frauds or scams, which can affect the specific entity and various fund houses or pension/retirement funds. Moreover, unawareness of such frauds/scams can lead to a greater financial depression, which is as dangerous as wars with other nations. Consequently, there is a huge need to have financial fraud investigators reveal the fraud or scam and throw light on how a fraudster adopts it. Therefore, big financial institutions, security market regulators, and criminal investigative agencies require financial fraud investigators.
The major responsibilities of the financial fraud investigator are:
- To monitor the financial system and analyze the day-to-day occurrence of events.
- To adequately communicate the issues and present a real picture of the firm to the stakeholders.
- To understand the modus operandi of any fraud and set up a mechanism to avoid such situations in the future.
- Identify all kinds of potential loopholes in the system and get it filled with the proper governance process.
Top Hiring Companies
- In the United States, the top companies that hire financial fraud investigators are the Federal Bureau of Investigation, Capital One Financial Corp, JP Morgan Chase and Co, Geico, HSBC, Anthem, AmeriHealth Caritas, etc.
- The average salary of fraud investigators in the United States is around $38,000 to $74,000.
- Fresher fraud investigators can earn up to $49,000.
- 1-5 years of experience can earn up to $52,000.
- 6-10 years of experience can earn up to $59,000.
- 10-20 years of experience can earn up to $65,000.
The chief compliance officer or chief fraud investigator (with experience of more than 20 years) can earn up to $74,000, including perquisites and incentives.
- Master’s degree in accounting.
- Bachelor’s degree with a professional degree like CPA, CFE, or CFF.
- A fraud investigator is always needed when any big financial scam comes to light. They play a major role in solving the cases and checking the loopholes which led to the financial catastrophe. Financial investigators are the police of a country’s economy.
Forensic Accounting Careers Conclusion
Forensic accounting careers/jobs are flourishing at the topmost pace in the nation. Therefore, there is a great need for the government to make citizens aware of the career opportunities in this field so that more experts get to develop in the market.
This has been a guide to a Career in Forensic Accounting. Here we provide the list of the top 3 forensic accounting job options, descriptions & paths, including accountant, financial analyst, etc. You may also have a look at these career articles below –