Forensic Accountants: Not Just For Fraud Anymore

Forensic accountants are becoming more mainstream, as attorneys, executives, and managers have learned that these specialists are the most ready to deal with their fraud matters. Companies no longer just call up their auditors to have them come look things over when management suspects fraud. They want specialists, and they're smart to do it.

Why is a forensic accounting specialist such an asset to a fraud investigation? First, there is a different skill set that is applied to a fraud investigation versus a traditional audit. Our training is a bit different even though we still must be aware of the technical accounting issues always present.

But you can think of a traditional auditor or accountant as someone who checks the math in the accounting department and occasionally consults on the correct application of the accounting rules. The forensic accountant, however, is going to look at the numbers... and rather than checking for accuracy, the forensic accountant is trying to look behind the numbers and find out what's not quite right.

The second differentiation between forensic accountants and traditional accountants and auditors is the "investigative intuition." When I say that, I mean that gut instinct that tells you in which direction to send your investigation... That little voice in your head that is telling you something isn't quite right with a particular number or account. That's something that I don't think can necessarily be learned, but it can be honed if someone has good instincts and are willing to work on them.

So clearly, a forensic accountant can be valuable in a fraud investigation. But her worth can extend far beyond just the investigation. All of that fraud-finding experience can be invaluable in fraud-fighting. As a company is attempting to develop its fraud prevention efforts, help from a true expert can make those efforts even more effective.

It's easy to see how someone with experience investigating hundreds of frauds can be helpful. She's seen some of the most common fraud schemes and some of the most vulnerable areas of a company in action. Consider involving a fraud investigator in your company's fraud prevention planning and execution. Help on the front end of the process will likely help the company in the long run and reduce the need for help investigating fraud.

Tracy L. Coenen, CPA, MBA, CFE performs performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.