Just because we associate the word “forensic” with popular television shows like CSI, it does not mean that it always has to do with the process of working a crime scene, fingerprinting, or analyzing blood splatter patterns. In fact, the real definition of forensic is simply “relating to the application of scientific knowledge to a legal problem” or “usable in a court of law.” So despite common beliefs, forensic accounting actually has nothing to do with dead bodies or DNA analysis. Forensic accounting is the practice of utilizing accounting, auditing, and investigative skills to assist in legal matters.
Although television hasn’t latched on to the idea of forensic accounting for a new hot television series- I guess calculators can’t get ratings like guns and handcuffs!- it’s still some pretty exciting stuff. Forensic accountants investigate crime against property, such as fraud, accounting irregularities, and other white collar crimes.
Remember any of these cases?
- When European publishing giant Robert Maxwell died in 1991, his entire company collapsed because of the financial games that Maxwell had been playing with bank loans and investors’ funding. Forensic accountants spent 14 years unraveling the more than $1 billion that Maxwell embezzled from clients and shareholders.
- Ivan Boesky was brought down by forensic accountants at the Securities and Exchange Commission after they discovered his trail of insider trades. Boesky then turned in his pal Michael Milkin. After forensic accountants presented him with the evidence, Milkin pleaded guilty to securities fraud. Both men were sentences to prison.
- Al Capone was able to avoid prosecution by some of the best detectives and FBI agents of the day. Eventually, however, he was brought down by forensic accountants for tax evasion. IRS agents were able to track the earnings Capone made from all his illicit activities and nail him when he didn’t report them on his tax return.
Interested in learning more?
As cases of white collar crime become more frequent, complex, and sophisticated, there is higher demand for forensic accountants. In fact, forensic accounting is considered to be a very secure career choice for the foreseeable future. It has become the “hottest” area in the field of accounting with very high earning potential. For more information, check out How to Become a Forensic Accountant.
