If you’re involved in litigation that has to do with numbers, get a forensic accountant on your side. Forensic accounting is a career with an increasing demand across the nation. Scott Maier, partner in our forensic accounting practice, sits down with the Long Island Business News to discuss why forensic accountants are ‘dollar detectives.’
By: Jakub Lewkowicz
If you’re involved in litigation that has to do with numbers, get a forensic accountant on your side.
The work of forensic accountants put Al Capone behind bars on charges of income tax evasion in 1931 and discovered O.J. Simpson’s hidden assets that cost him a $33 million settlement to his victims.
Forensic accounting, a specialization of accounting that requires practitioners to analyze financial data and prepare it for use in court or mediation, is a career with an increasing demand across the nation.
An increase in computer crimes and fraud is one of the factors driving the need for forensic accountants. As companies are more reliant on technology to conduct their services, more data is available and accessible through computers. Forensic accountants sift through that deluge of information.
“To be a skilled forensic expert, you need to have the ability to bridge the gap between the technical explanation and what the lay person will understand,” said Scott Maier, a partner at accounting firm Friedman, which has offices in Uniondale. “That’s the key.”
With a recent considerable growth of jobs in New York City, the finance district and surrounding areas are in constant need of accountants. Starting salaries across the board were projected to grow by 3.5 percent in 2015, according to Robert Half’s 2015 Salary Guide: Accounting and Finance. On top of that, forensic accountants can earn even more.
“Specializations can have higher hourly rate,” said Philip Kanyuk, a litigation and valuation services partner at Nussbaum Yates Berg Klein & Wolpow and the president of the Nassau Chapter of the New York State Society of CPAs. Billing rates for testifying as a forensic accountant is at a premium. “It’s gotten to be a much more significant accounting practice,” he said.
Glenn Liebman, a partner at Syosset business valuation, forensic accounting and litigation support firm Klein Liebman & Gresen, said demand for forensic accountants has been increasing and salaries are higher than those of general CPAs. Forensic accountants are frequently involved in divorce litigation and partnership dissolutions, in which the cases determine how the assets are divided, and with internal fraud cases.
Maier said forensic accountants are usually summoned by attorneys who are advocating for a client but can also be hired by a court. They are also retained by insurers, companies or creditors to investigate economic or financial damages. To be considered for a case, forensic accountants need to gain publicity by going to bar association meetings, giving presentations, marketing, writing or contributing to articles on the topic.
“We work hand in hand; the lawyer is the quarterback and we are one of their tools,” Kanyuk said. “A lawyer is an advocate for the client; we are an advocate for the truth.” Forensic accountants have to be independent by professional standard and let the numbers speak for themselves, said Liebman.
Sometimes they investigate one of the parties involved but can also be hired as a joint financial expert¬¬known as a neutral accountant in New York¬¬ by both parties.
Fraudsters can try to hide their information, claiming that it is irrelevant to the case or it is proprietary information, but forensic accountants can get their hands on it by a process called discovery, Maier explained.
Through this process, the forensic expert submits a document review request, asking for documents that can lead to evidence and most of the time these documents are acquired. “We have to make sure the documents are tailored to whatever type of loss we’re looking at,” Maier added.
Forensic accountants are equipped with the skills to find the right information. A firm understanding of tax returns and financial documents, analytical skills, organization and the ability to communicate to clients and lawyers are all essential in the profession, according to Liebman.
Forensic accountants also need to write well in order to present their findings to court in a coherent report. Kanyuk emphasized that “a healthy set of skepticism” is necessary, while Maier added that “a desire to look for trouble” and investigate is fundamental. With an increase in demand and notable salaries, anyone studying accounting should keep this burgeoning specialization within their view.
After graduating with a bachelor or master of science degree in accounting, passing the CPA exam issued by the American Institute of Certified Public Accountants is strongly recommended.
After, that many companies encourage taking the Certified Forensic Examiners (CFE) exam or earning the Certified in Financial Forensics (CFF) credential or both. Maier said that receiving the CFE credential is more difficult but. It pays off because according to the Association for Certified Fraud Examiners’ 2013/2014 Compensation Guide for Anti¬Fraud Professionals, CFEs earn 25 percent more than their non¬certified colleagues. Before accountants join the forensic specialization, they typically work as CPAs for a few years to gain general experience.
“People that have a strong CPA background make the best forensic accountants because they understand the meaning of those numbers,” Maier said. Some in the field recommend acquiring a general accounting education at first, but some universities are creating courses in forensic accounting to introduce the specialization early on.
Once in the profession, forensic accountants review a lot of documents including financial bank statements at first, then they supervise the reviewing process and finally present findings in court once they become a partner, Liebman explained. The profession also offers variety. “
One day you could be looking at one business¬¬a medical practice, and the next day looking at a hedge fund,” Liebman said.
“No two days are the same.” The best forensic accountants are dedicated to their jobs and will prioritize unhindered access for the client. “It’ll be 11:30 on a Friday or Saturday night and I’ll answer a call.