Does anyone know anything about forensic accounting?
This is something I’m interested in, but am not sure how to go about it. What should my major be? Most schools don’t have a forensic accounting degree, so would a regular accounting degree be a good place to start? Any info you have would be appreciated.
Thanks for the info, sothere!. I’m 21 and already have a few years of college done, but I’m going to change my major. I started out as an education major becuase that’s what everyone said I should do. But I hated it….much more interested in business.
I know a little about forensic accounting. Some investment research houses employ forensic accountants. Hedge funds probably do.
It is a little interesting (unnerving maybe!) that you are considering forensic accounting and you arent in school yet. Have to admit–it isnt exactly a glamorous fast paced industry. I’d rather be a stock analyst than a forensic accountant but to each their own.
Forensic accounting is more interested in examining the quality of a company’s accounting than auditing the company’s books. Accounting, like lots of areas in finance, has “wiggle room”. Yeah, let’s deduct this…..that doesnt have to be on the balance sheet….stuff like that.
So the auditors of a company might sign off on a company’s accounts saying everything is legal, etc., but a forensic accountant might look at the books and say, “Yeah, this is legal and everything, but this item really should be listed as long-term liability not a short term one.”
Think about it when you file your own taxes. Maybe you took a $250 deduction for charity. Your accountant signs off on it. All is well. However, a forensic accountant looks at it and says, “Yes, the return looks fine, but this person never donated to this charity before and this deduction pushed her total deductions over $5000. That dropped her into a lower tax bracket so she saved a lot of money. I wonder if this deduction was really made?”
In a real world example, a stock analyst from a major research house did a presentation at my firm pitching “XYZ” stock saying that she loved it, etc. and that we should buy it.
Two weeks later the same house sent over their forensic accountant and he bashed XYZ saying that he agrees with the research analyst in that it is a good business, but he also thought XYZ’s accounting was so poor that it was a ticking time bomb and that we should avoid it. Go figure.
Anyway, if you wanted to enter forensic accounting then yes, studying accounting is the place to start but you will also want to be proficient in financial statement analysis. Consider an MBA or if you are truly a masochist, haha, study for your CFA while you are college as well.
The Business Society: Forensic Accounting (Trailer)