Forensic Accounting in India started with one word – Indiaforensic in the year 2006. It is an exciting career option for accounting, finance and commerce graduates. A forensic accountant is the bloodhound of bookkeeping. These bloodhounds sniff out fraud and criminal transactions in banks, corporate entities, or from any other organization’s financial records.
Over the decade it has evolved as one of the most sought-after career options for accounting and auditing professionals.
Many commerce and finance graduates are looking for opportunities in this niche domain. However, little guidance is available in India to be a successful forensic accountant. I have penned down my experiences to become successful in this challenging profession, in my book – Students Handbook on Forensic Accounting. I have outlined the different opportunities available to aspirants in this domain.
What is Forensic Accounting?
In easy words, forensic accounting means checking financial information for cases in courts. Forensic Accountants are pros who help police with money frauds and investigations. They talk in court as experts.
It was defined in 1940 in the United States as the combination of accounting, auditing, and investigative skills. CA Mayur Joshi, in 2003 refined the term forensic accounting, when the profession was still in the nascent stage. He added the importance of technology to the routinely discussed accounting, auditing, and investigative skills.
In today’s world of forensic accounting, digital forensic tools are a must. Experts now use Artificial Intelligence and Machine Learning to catch frauds early on. Looking at data closely is really important, and Benford’s law is a super useful tool. It helps spot things that might not be right in the numbers.
One of the first things to get into forensic accounting is to understand the difference between Auditing and forensic accounting. I have seen number of CA aspirants posing this question. The forensic accountants hound for the conclusive evidences.
External Auditors find out the deliberate misstatements but the Forensic Accountants find out the misstatements deliberately. External auditors look at the numbers but the forensic auditors look beyond the numbers. Its an exciting field and to get recognized as the forensic accountant it is necessary to have the requisite credentials. Many professionals proudly flaunt their Certification on professional social media sites such as Linkedin .
Forensic Accounting Certifications
There are many certifications offered by Indiaforensic, Riskpro Learning and other providers which include CFAP, CBFA, CSMFA, CIFA.
| Certification Name | Target Audience | Mode | Registration Link |
|---|---|---|---|
|  Certified Forensic Accounting Professional  |
Accounting, Commerce, and Finance professionals with three years of experience. | Distance Learning | CFAP |
| Global Certification in Forensic Accounting and Fraud Detection | Global finance, accounting, and management students aspiring to become forensic accountants | E-learning | CFAFD |
| Certified Bank Forensic Accountant | FCU, RCU, Vigilance and Market Intelligence Units of Public sector or private sector banks | Distance Learning | CBFA |
| Certified Stock Market Forensic Accounting Professional | Stock Brokers, Investors, PE Funds and Credit rating analysts | Distance Learning | CSMFA |
| Certified Insurance Forensic Accountant | Personal Injury, Insurance Claims, Internal Audit teams of Insurance companies | Distance Learning | CIFA |
| Certified eCommerce Frauds Specialist | Professionals from eCommerce, Payment Gateways | Elearning | CEFS |
Eligibility for Certifications
There is a constant demand for certification as stock market fraud is one of the major areas of practice for certified forensic accounting professionals. It is not necessary to be a Chartered Accountant to complete this certification in forensic accounting. However, it is recommended that students should have more than 3 years of experience. If you already finished your certified fraud examiner (CFE) or certified public accountants (CPA) training, you can skip the CFAP exam.
What do you learn in the CFAP program?
Becoming a Certified Forensic Accounting Professional (CFAP) is a fantastic way to start a bright career journey. This course is really popular because it covers a lot of topics that are important for people who work with money, like accountants and auditors. It’s like a roadmap to a successful career in finance and auditing. These include:
- Principles of Forensic Accounting
- Pillars of forensic accounting – Litigation support and investigative accounting
- Role of the Forensic Accountant
- Scope of Forensic Accounting services
- Classification of Frauds
- Red Flags of Fraud
- Data Analysis for forensic accountants,
- Forensic Audit of Financial Statements
- Revenue recognition frauds
- Money Laundering
Simulated Examinations and Questions
To become a CFAP, you have to pass the Uniform Examination. You need to score at least 75% marks to earn the title of a Certified Professional. The certification exam includes 100 questions, and you must finish it within 2 hours.
Those who are simply exploring the domain can take up the simulated examinations designed for the aspirants. It is important to understand the inclination, before taking the decision to opt for CFAP or any of the above programs. Simulation exams consist of 20 questions and are free and open to all.
Forensic Accounting in India
Sherlock Holmes was likely the most well-known person who practiced as a Forensic Chemist. However, Kautilya, the first economist, openly understood the importance of investigative accountants. He talked about forty ways of embezzlement a long time ago.
In addition to the specialized knowledge about the techniques of finding out the frauds, one needs patience and an analytical mindset. One has to look beyond the numbers and grasp the substance of the situation. Forensic Accountants do the work of a smart accountant than a traditional auditor. Smart accountant needs to question seemingly benign document and look for inconsistencies. He searches for evidence of criminal conduct or assists in the determination of, or rebuttal of, claimed damages.
Scope of Services of Forensic Accountant
Forensic accountants have great job opportunities that are growing quickly. Indiaforensic Research says that forensic accountants are earning more money because their work is becoming more important. Companies need forensic accountants to look into insurance claims when someone is hurt. They also use forensic accountants to figure out what went wrong with bank loans. And if people get tricked by fraud schemes, forensic accountants help calculate how much money they lost.
In India the formation of the Serious Fraud Investigation Office was a boon for the Forensic Accountants. SFIO created enough awareness in the government agencies about the economic damages, investigations, forensic accounting, etc. Reserve Bank of India issued a notification on forensic auditing in 2009. In the drive to reduce Non-Performing Assets, Bank Forensic Auditors are playing a key role.
In India, we really need Forensic Accountants because fraud is increasing. Police officers are the ones who are good at studying fingerprints and drugs. This fact is a strong reason for accountants in India to get into this field. It’s something new. A Forensic Accountant works for organizations like CBI, CID, and EOW in India.
Forensic Accountant & Growing Community
Until recently, India didn’t have its own special group of forensic accountants. But now, we have over 500 CFAPs in different Indian and global companies. These experts have become an important and powerful community here. Even a lot of accounting firms have started their own special practices in this field.
More and more regulators and administrative agencies will need services related to forensic practice. Accountants will increasingly find themselves participating in what is essentially a form of forensic accounting practice. The evolving Accounting, Auditing & Assurance standards also support this idea.
However, there is a significant difference between forensic accounting and forensic auditing. I have seen a lot of people using this term as a substitute for each other. Though both are post-mortem and are seemingly similar professions. Their application in practical life is different.