The term "forensic accounting" was first used in 1946 by Maurice E. Peloubet, a partner in a New York accounting firm. He wrote about the use of accounting in courtroom proceedings as part of testimony, but acknowledged that investigation was becoming more prevalent for accountants due to the increase in government agencies that regulated financial practices. Journals began to publish articles about the connections between law and accounting. In 1953, a New York lawyer named Max Lourie claimed that he invented the phrase "forensic accounting," although Peloubet wrote about it first. Lourie stressed the need for forensic accounting literature and training.
Becoming a Forensic Accountant
Forensic accounting can be a very lucrative and enjoyable career with a wide variety of potential employers. Forensic accountants -- like all accountants -- must have a thorough knowledge of Generally Accepted Accounting Principles (GAAP), business practices and applicable laws. In the United States, most forensic accountants have at least a bachelor's degree in accounting, with a few years of experience within that field.
The next step in becoming a forensic accountant is passing the Uniform Certified Public Accountant Examination to become a Certified Public Accountant (CPA). This exam was created by the American Institute of Certified Public Accountants, which is a condition of employment by many firms, in addition to meeting other state and federal eligibility requirements. Continuing education is a requirement of maintaining the status of CPA, and many aspiring forensic accountants attend graduate school to fulfill this requirement, as well as gain more knowledge in the field and become more marketable. Many universities offer master's degrees in forensic accounting or in business administration with a concentration in forensic accounting.
Some forensic accountants take courses in:
- Law enforcement
- Criminal law
- Business law
- Business and finance
- Information systems
There are several organizations that provide training and additional certification for forensic accountants. The American College of Forensic Examiners International (ACFEI) began offering a designation of Certified Forensic Accountant (Cr.FA) in 2001. There is also the Association of Certified Fraud Examiners (ACFE), which offers a designation of Certified Fraud Examiner (CFE), and the Association of Certified Fraud Specialists (ACFS), which has a designation of Certified Fraud Specialist (CFS). Each organization requires that its members possess varying degrees of education and experience, and they must sit for additional exams. These certifications show that a forensic accountant has training and experience beyond that of a standard accountant.
For more information about forensic accounting and related topics, check out the links on the next page.