The 'CSI Niche': AICPA Boosts Forensic Accounting
With complex financial issues playing a larger role in litigation, and people increasingly turning to CPA experts to involve themselves in everything from criminal investigations to shareholder disputes to uncovering assets in messy divorce cases, the demand for CPAs who specialize in forensic accounting is growing exponentially. And the American Institute of CPAs (AICPA) is stepping up to meet that need.
The Certified in Financial Forensics Mentor Program, launched on March 20, is designed to help AICPA members interested in "developing their skills and business practices in forensic accounting," or protégés, by pairing them with experienced professional mentors who will guide their training in forensic accounting.
According to an AICPA survey, forensic accountants said they've seen a 20 percent increase in demand for their services, while roughly one-quarter of forensic accounting firms have added more forensic professionals to their practices. That demand is only expected to increase in the coming years, the survey predicted, due to an upswing in litigation and regulatory enforcement.
James Hart, CPA/ABV/CFF, managing member at the Lightfoot Group, LLC, an Atlanta-based financial consulting and forensic services firm, and a future program mentor, says the Financial Forensics Mentor program is designed to enhance protégés' success in financial forensics and ease their transition into a challenging and rapidly evolving field.
"Mentors help emerging practitioners navigate practice and development issues, assess credentials and training, provide suggestions for resources and solutions, and generally help practitioners get plugged into the practice, which differs substantially from traditional audit and tax work," said Hart.
The mentorship program is open to CPAs who are just entering the field of forensic accounting, as well as more experienced CPAs looking to expand their forensic practices.
The AICPA will pair forensic accounting protégés with experienced mentors, like Hart, who hold the AICPA's certified in Financial Forensics credential. Mentors will provide guidance and help their protégés understand how the financial forensics industry works, while easing their assimilation into the field.
Hart believes the increased demand for forensic accounting services stems from several related factors including: the increased sophistication of financial issues in litigation; the realization that forensic accounting covers much more than simple fraud investigation; a greater willingness to take advantage of experts with more varied skill sets, such as expertise in valuation of restricted shares of stock, intellectual property damages, asset tracing in divorce; and, fallout from the recent boom-and-bust cycles.
While the idea of being a CSI of the CPA profession may seem inherently intriguing and glamorous to all CPAs, the idea candidates, Hart said, must possess a trinity of basic abilities to succeed in the field. "They have to possess analytical, investigative, and communication skills," Hart said.
The AICPA's Certified in Financial Forensics (CFF) Core Focus Wheel identifies seven areas of specialized forensic knowledge—bankruptcy, electronic data analysis, damages calculations, family law, financial statement misrepresentation, fraud, and valuation—that "go beyond the core skills inherent to the CPA," Hart said.
"The types of cases encountered are varied and ever-changing. While forensic CPAs might investigate allegations of embezzlement or kickbacks, they might also compute business interruption claims, determine business economic losses, and compute lost profits," Hart said.
Examples of other cases where forensic accountants might be needed include criminal investigations, shareholder disputes, complex economic losses, investigating whistleblower claims, matrimonial disputes, and valuing minority interests in closely held companies, Hart said.
On occasion, forensic accountants have even earned a mention, by profession, if not by name, in high-profile cases, like celebrity divorces, Hart said.
Rumbi Bwerinofa-Petrozzello, CPA/CFF, is a prospective protégé in the program, said she is excited about the opportunity to be matched with a forensics accounting mentor: "I have attended the FVS conferences and have met both helpful and supportive members of the financial forensics profession. However, I still had a need for a more formal relationship with an experienced CPA."
The AICPA established the CFF credential in 2008 for CPAs who specialize in forensic accounting. The CFF credential is granted exclusively to CPAs who have met rigorous education, experience and testing requirements. More information is available online for AICPA members interested in the CFF Mentor Program.