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

Forensic accounting is the branch of accounting that deals with detecting and preventing financial crimes. As a forensic accountant, you'll use your competencies in accounting, auditing, and investigative techniques to detect and analyse cases of fraud and other financial crimes. 

A study in 2024 by the global anti-fraud organisation, the Association of Certified Fraud Examiners found that the median fraud by business owners and executives totals 500,000 USD, with fraud committed by managers and employees wracking up significant, but lower costs [1].

Read on to learn more about how forensic accountants use their investigatory and analytical skills to identify different types of financial crime and how you might enter this dynamic career.

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; oftentimes, forensic accountants will be asked to present accounting analysis and evidence in a trial or business-related issues. You might end up working in one or several of these areas during your career as a forensic accountant:

• Business economic losses and bankruptcy: You’ll 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: You’ll 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: As a forensic accountant, you may look for assets that have been transferred or concealed by an individual or business. 

• Insurance claims: You'll investigate the claims to determine their validity.

• Money laundering: If you identify a financial crime, you may pass on details to law enforcement agencies to investigate. You may also work with them as a local partner.

• Securities fraud: You’ll follow the regulations of the Securities and Exchange Commission (SEC) and Finance Industry Regulatory Authority (FINRA) to investigate cases of possible securities fraud.

• Tax fraud: You’ll work with the IRS and local government to investigate cases of possible tax fraud.

Forensic accounting audit procedures

An organisation'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 typical process of a forensic accounting audit might include:

1. Investigation

The forensic accounting investigation's first step involves gathering all relevant information. It includes financial statements, tax returns, bank records, and any other documents that could provide information. Once you have all the needed data, 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, you’ll report your findings to the client. Depending on the nature of the case, you may share them with law enforcement or other regulatory agencies. 

3. Litigation

In some cases, the findings of a forensic accounting investigation can lead to litigation. In these instances, you may be asked to provide expert testimony or support during the trial.

How to become a forensic accountant

Forensic accounting is a rapidly growing field that offers many opportunities for those with the right skills and forensic accounting education. As you pursue a career in forensic accounting, you'll need to complete a few steps to begin.

Get a relevant undergraduate degree.

A few different types of degrees can lead to a career in forensic accounting. A bachelor's degree in accounting, forensic accounting, finance, or a related field is typically the minimum requirement for entry-level positions. However, employers may also prefer candidates with a master’s or doctoral degree. Enrolling in forensic accounting courses or considering a concentration, if possible, may be helpful in gaining a better understanding of the field. 

Pursue certification.

Earning professional credentials is an important step in your career to become eligible for a role as a forensic accountant. Consider becoming a Certified Fraud Examiner from the Association of Certified Fraud Examiners, or a Certified Valuation Analyst from the National Association of Certified Valuators and Analysts. You could also consider earning the Certified Forensic Accounting Professional credential from Indiaforensic Centre of Studies.

What skills do I need to become a forensic accountant? 

At a high level, you'll need to develop skills in accounting, auditing, and investigative techniques. Forensic accounting is an advanced form of accounting that focuses on investigating financial crimes. To become a forensic accountant, you need a blend of both technical and workplace skills:

Technical skills

You'll need technical skills in accounting, finance, and information technology. The following are skills necessary to understand financial statements and transactions and reconstruct financial data. 

• Familiarity with accounting software

• Able to analyse financial documents

• Know how to conduct technical interviews for witnesses or suspects

• Have legal knowledge to review documents 

• Ability to analyse data to identify trends 

• Ability to conduct internal audits 

Workplace skills

To become a forensic accountant, you’ll also need to develop various workplace skills to handle data and present findings. Some important skills to have to succeed as a forensic accountant include: 

• Critical thinking

• Detail-oriented

• Excellent communication

• Analytical thinking

Is forensic accounting right for you?

Getting qualified to be a forensic accountant takes time, so before you jump into this career, it's important to assess your interests and define your goals. This will help you determine if forensic accounting is the right career path for you. Ask yourself 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 you 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 specialise in a particular area of forensic accounting? 

Job titles of forensic accountants

You’ll find various jobs in forensic accountancy. Explore a few examples and the annual median base salary of each.*  

• Forensic auditor: ₹2,14,452

• Fraud examiner: ₹5,92,027

• Fraud investigator: ₹4,50,000

• Forensic accountant: ₹10,00,000

You may also encounter other job roles that overlap with forensic accounting, such as the following: 

• Financial analyst: ₹6,00,000

• Anti-money laundering investigator: ₹5,75,000

• Asset recovery specialist: ₹7,05,000

• Fraud prevention specialist: ₹4,17,500

*All salary information based on data from Glassdoor as of October 2024; it represents base pay, which excludes any bonuses, commissions, and other forms of additional compensation. 

Continue learning about forensic accounting on Coursera

Forensic accounting involves professionals who monitor financial activity for fraud. It is a complex and ever-changing field, so gaining specialist knowledge and keeping up with the latest developments is essential. You can use 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. 

You might like to consider the Forensic Accounting and Fraud Examination Professional Certificate offered by West Virginia University on Coursera. You can use the knowledge and skills you build as a starting point to understand more about forensic accounting.

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