What is forensic accounting one might ask? It has been on the rise lately and has been talked about for years, but do people really know what it is. Well look no more; you came to the right place. This paper will discuss the ends and outs of forensic accounting. For example, the certifications required to become one, the history of forensic accounting and many different types of crimes that forensic accounts handle.
Forensic accounting is an investigative style of accounting used to verify whether a single or company has occupied with any illegal financial movement (Forensic Accounting Online, 2013). It is used to detect fraudulent activity such as false insurance claims, embezzlement, bribery, tax evasion, etc. Since forensic accounting has grown many companies now have departments specifically for forensic accounts to work. Forensic accounting consists of two areas, litigation and investigation. The litigation support part of a forensic accountant's job involves figuring out the amount lost by parties in a legal dispute while the investigation area of the profession involves combining the abilities of both accountants and detectives (Winters, 2008). This will be discussed more about later in the paper.
If it wasn’t for criminals laundering money and shady mob bosses, forensic accounting would not be as popular as it is now. Forensic is derived from the Latin word forensis meaning “related to the courts”. Forensic accounting has been around for many decades. It originated in the 19th century and was used to detect tax evasion amongst businesses that attempted to hide earnings in bank accounts in multiple states. Nowadays, forensic accounting is happening more often because of the increase of fraud, use of technology and other illegal activities. In today's society, increased technology has given people the ability to commit fraud on a huge scale and get away with it fairly easily (Winters, 2008). More criminals are now using computers and cell phones to store illegal activities and hide them from others. Also, since forensic accounting is so similar to the Federal Bureau of Investigation (FBI) in helping to solve crimes and protecting people, both parties decided that it would be in their best interest to work with each other. The FBI works to put criminal behind bars and forensic accounts work to testify against them.
Certifications applicable to the forensic accounting profession include: Certified Public Accountant (CPA), Masters of Business Administration (MBA), Certified Valuation Analyst (CVA), and Certified Fraud Examiner (CFE).
The Certified Public Accountant (CPA) license is the premier certification for accountants. There are requirements that must be fulfilled before a CPA license is awarded to an applicant. Requirements vary depending on which state the candidate submits their application in. A majority of states require the applicant to have at minimum 150 college credit hours. Typically...