Forensic Accounting refers to the application of financial skills to resolve disputes of fraud and misconduct of finances in business. It is an integration of accounting, investigation, and auditing with a sound knowledge of business and legal systems. The scope of Forensic Accounting includes:
- Designing an accounting process for the verification of data.
- Looking for an unusual development in accounts for any possible frauds.
- Continuous surveillance of transactions of a variety of businesses.
- Performing a routine schedule of audit processing.
Need for Forensic Accounting
These days almost no domain is left untouched by frauds, dishonesty, corruption, money laundering, etc. Forensic Accounting is a field that checks all these activities.
Criminal Investigation: Forensic Accountants prepare detailed reports of financial implications in case of fraud. It helps the police and the investigating authorities in examining the case in detail.
Dispute Settlement: Forensic Accounting professionals help resolve disputes in business communities. They settle intellectual property infringements, liability claims, etc.
Professional Negligence: In the case of employee negligence leading to non-compliance with auditing and accounting standards, Forensic Accountants examine the loss through quantification.
Detection of Fraud: Forensic Accountants detect fraud by tracing the papers and other activities of the employees of the company. They tactfully devise strategies to find out the truth.
Forensic Accountants - Skills and Qualifications
Forensic Accountants are very important professionals for every organization. From public to private, every entity needs to ensure that they comply with the governance codes and establish transparency in their systems. Forensic Accountants help in this cause by maintaining fair accounting and detecting any misconduct.
Due to the nature of their tasks, Forensic Accountants can find employment in Banks, Multinational corporations, Police forces, Freelance, Insurance companies, and even government agencies, etc.
To be a Forensic Accountant, one needs to do a bachelor’s or master’s degree in Accountancy. A diploma in banking and finance can also provide the necessary qualification required to build a substantial career in this field.
Commerce graduates can also pursue a career in Forensic Accounting with a financial accounting course.
A Chartered Accountant with experience in accounting and auditing also makes for an eligible candidate for a Forensic Accountant.
To become successful in the Finance career, one should first work under an expert Forensic Accountant as it will provide them with insights about this career. The necessary skills required for the role of Forensic Accountant are:
- Analytical aptitude
- Attention to details
- Communication skills
- A knack for finding loopholes
- Compliance with ethical code of conduct, etc.
Forensic Accounting in India
As India is a country where monetary frauds and scams are common in business organizations, RBI has made Forensic Accounting audits mandatory for all banks. A Serious Fraud Investigation Office (SFIO) has been established which has boosted the growth of this sector and enhanced job opportunities. With the growing online frauds and cyber-security breaches, the demand for Forensic Accounting professionals is increasing.
The income in this field is also quite lucrative. The average salary of Forensic Accounting professionals is around INR 984,533 according to payscale.com.
One can find jobs in this sector through related titles like Fraud Analyst, Risk Analyst, Fraud Investigator, Anti-Money Laundry Analyst apart from the usual Forensic Accountant title. The salary incentives grow with the number of years of experience in this field.
Given the present scenario of financial irregularities in the country, Forensic Accounting has a very bright future. Also, the lack of qualified and experienced Forensic Accountants in India makes this a very valuable career for students to pursue.