by Curnow & Curnow, PLLC. • May 5, 2014 • Blog
Increased Demand for Forensic Accounting: What is Driving This Trend?
The use of forensic accountants is not new to corporations or government agencies. However, the increasing demand for and awareness of forensic accounting services has started to grow exponentially due to financial violations by corporations like Enron and HealthSouth – situations where hundreds of employees were left with no retirement funds.
According to the 2012 Global Fraud Study by the Association of Certified Fraud Examiners (ACFE), the typical organization loses at least 5% of its revenues to fraud each year. Financial statement fraud schemes caused the greatest median loss among the respondents at $ 1 million. Another interesting fact revealed in this study is that asset misappropriation schemes comprised 87% of cases reported to the ACFE.
So, it is no wonder that organizations like the American Institute of CPAs (AICPA) are now launching forensic accounting certification programs. Already a survey conducted by the AICPA has noted a 20 percent increase in demand for forensic accounting services – and that number is expected to grow as more regulatory enforcement and litigation occurs.
Forensic Accounting Goes Beyond Core CPA Services and Skills
Forensic accounting is not just for fraud detection and investigation. A CPA firm that specializes in forensic accounting will also have knowledge and skills in areas such as: bankruptcy, electronic data analysis, damages calculations, family law, financial statement misrepresentation, fraud, and valuation. Anytime a company calls their finances into question they should consult with a forensic accountant. An accountant can help solidify or put to rest their claims. Some corporations are taking precautionary action by having forensic accountants on staff or contracted for continual support – also contributing to the high demand for forensic accountants.
Like it or not, the world today is driven by finance – whether it is personal or corporate. From finding funds being hidden in a divorce settlement to uncovering shareholder fraud, there is a need for forensic accounting services in and out of the courtroom.
What is Forensic Accounting?
Forensic accounting is a specialized field of accounting. It often involves crimes against property, such as fraud. It can also be used to solve civil disputes. While it might not sound as glamorous as crime scene investigation, the field is growing. This is primarily due to high-profile, white-collar crimes involving large corporations. Forensic accountants help uncover the extent of the fraud, identify any accounting irregularities, and create a method for tracking down funds.
Forensic accountants can be brought into a trial to testify, while others work in the background supplying information for further investigation. They can be used in low and high-profile cases involving, but not limited to:
- Criminal Investigations
- Shareholder Disputes
- Economic Losses
- Whistleblower Claims>
- Valuing Minority Interests Held by Companies
To learn more about forensic accounting or to see how Curnow & Curnow PLLC can assist you with your financial investigation, call 360-676-6655 or request an appointment online.