Overview

What is a forensic accountant and what do they do?

Forensic accountants can be thought of as financial detectives, investigating fraud or financial irregularities, and advising on the financial aspects of disputes (“forensic” means suitable for use in court). Accountants in this area combine their knowledge of accounting and finance with legal investigative techniques to determine if an activity is illegal

The work of a forensic accountant ranges from fraud investigations to quantifying losses and analysing damages arising from breach of contract. They often assist in professional negligence claims where they use their experiences and analytical skills to assess the work and performance of other professionals. They may also be involved in valuing a business (or other assets) as part of a commercial negotiation or dispute, assisting with data protection issues or helping companies that have suffered (or want to prevent) cyberattacks.

Key responsibilities 

Responsibilities will vary, but examples include:

  • Conducting forensic analysis of financial data
  • Performing research to trace funds and identify assets
  • Performing interviews to extract and verify information
  • Preparing reports and findings
  • Preparing data for litigation
  • Giving expert advice at trials

Why are they important?

Following the financial crash of 2008, the Forensic Accounting career has become more prevalent. The role is likely to increase in prominence as the business environment becomes more complex and there is a greater demand for accountability as companies seek to demonstrate their commitment to financial reform

Competencies needed for this role

Excellent numerical, analytical and problem-solving skills are essential for this role, as is the ability to be discreet and objective. Forensic accountants also need to have strong communication skills and a high level of attention to detail

Career opportunities presented by this role

Compensation for the role is very good and the opportunity to set up as a sole practitioner allows for flexibility. In addition, whilst Investigations can start in the UK, enquiries may lead to international sources, meaning global travel is a possibility
 

Competencies

High level competencies required by accountants (forensic) include:

  • Governance, Risk and Control

    A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C. Identifies and manages risk appropriately.

    D. Uses risk management for the best interests of an organisation and its stakeholders.

    E. Monitors and applies relevant legislation, policies and procedures.

     

  • Audit and Assurance

    A. Advises on and communicates effectively the role and scope of audit and assurance engagements to relevant stakeholders.

    B. Applies regulatory, legal, professional and ethical standards relating to audit and assurance engagements.

    C. Plans and prepares for audit and assurance engagements.

    D. Performs effective audit, and assurance engagements.

    E. Reviews and reports on the findings of audit and assurance engagements.

    F. Guiding efficient and effective operations.

  • Ethics and Professionalism

    A. Develops advanced ethical values and professional skills in the promotion of public interest and the profession.

    B. Demonstrates personal effectiveness in fast changing environments.

    C. Encourages innovative thinking within the context of professional scepticism.

    D. Thinks proactively about the future, applying professional judgement and commercial intelligence and seeks specialist input when needed.

    E. Communicates effectively and influences others.