How to Become a Forensic Auditor
Do you like the idea of solving financial crimes in the corporate world without being in law enforcement? If this is what you want, then forensic auditing is the profession for you. Now that you have an interest, the next step is knowing how to become a forensic auditor.
People commit fraud and financial malpractice in more clever ways these days. Thus, it takes a combination of skills and comprehensive knowledge of financial crime to excel in this profession. Rest assured, this guide contains all the necessary information you need to become a professional forensic auditor. Here are the required qualifications, skills, salary expectations, and more information about life as a forensic auditor.
Introduction to a Forensic Auditor
Being a forensic auditor is close to being a detective, an investigator, or any other type of law enforcement agent. Forensic auditors are usually hired by companies who have issues with their financial records. They hire forensic investigators to look into their financial records to check for possible fraudulent activities within the company. On the other hand, companies hire forensic auditors as a proactive measure against imminent fraudulent activities.
Forensic auditors work closely with law enforcement professionals, especially those in the financial crimes unit. With the introduction of technology to banking and financial transactions, it is easier to commit fraud now more than ever. This makes it difficult to trace hidden funds and inconsistencies in financial records. Thus, a forensic auditor must dig deeper to find pieces of evidence of financial foul play.
Not only do corporate organizations hire forensic auditors, but individuals also do as well. For instance, in a civil case such as a divorce, one party may try to hide funds and other assets. Besides finding evidence to suggest financial foul play, forensic auditors may also be hired to help settle finance disputes.
Education and Qualification Requirements of Being a Forensic Auditor
Formal education is mandatory to become a certified forensic auditor. A Bachelor’s degree in financial accounting or any accounting-related course is the least academic qualification required for this role. Yet, some employers prefer a Master’s degree in forensic accounting, financial accounting, or any other forensic accounting-related course. Besides having a Bachelor’s or Master’s degree, other professional certifications in forensic accounting or finance are encouraged. For instance, the certified Chartered Accountant and Certified Fraud Examiner certifications are widely regarded. Also, having an educational background in programming or criminal law is an advantage.
Responsibilities of a Forensic Auditor
Forensic auditors have various responsibilities, some of which mirror that of an investigative journalist or attorney. However, the outcome of people’s businesses and assets depend heavily on how well they perform these duties. Here are some of the many duties of a forensic auditor you should know:
Giving testimony in court
A courtroom can be intimidating and scary for anyone. However, it is a place forensic auditors are very familiar with. In fact, one of the responsibilities of forensic auditors is testifying in court. This is where a forensic auditor puts his or her unique skills to use. At times, going to court is the only way to resolve the hostility between the parties involved. It takes composure and solid communication skills to make your case in court. Going to court for a forensic auditor is not always optional; it’s what they have to do.
Prepping documents and data for court hearings
Going to court is part of a forensic auditor’s job description. As long as the forensic auditor is involved in an investigation leading to a hearing, they would have to appear in court. A forensic auditor is not like the average witness in the witness box, they may not be lawyers but their input is vital to the case. Thus, they must back up their testimony with facts and figures. This is why every relevant document relating to the case must be presented in court. Sometimes not all the required documents are readily available or the court date. Therefore, part of the forensic auditor’s job is making sure all the necessary documents for court are ready.
Analyzing financial records
Out of the many responsibilities of forensic auditors, analyzing financial records is one of the most important duties. Since a forensic auditor’s job is centered on the financial situation of an organization and compliance with the law, the financial records of such an institution are the center of attention. Numbers don’t lie, and financial records bring the truth to the light. Forensic auditors examine the authenticity of financial records including purchases, bonuses, donations, miscellaneous spending, and other areas. These are some of the ways people commit fraud in organizations. If there are clear inconsistencies, it would lead to a proper investigation of financial records.
Investigating financial records
It is one thing to analyze financial records and another thing to investigate them. When there are inconsistencies in the financial records being analyzed, it could signal intent to commit fraud or an act of perjury. Thus, forensic auditors open an investigation into the financial records of their target organizations. It is not up to the financial auditor to convict anyone of fraud- that’s the court’s job. They only assist the court with investigating the case, especially financial records to find evidence of malpractice.
Creating and analyzing spreadsheets
A forensic auditor’s job revolves around the acquisition, investigation, interpretation, and recording of data. Thus, spreadsheets are always in their plans. To manage data to a reasonable extent, forensic auditors create spreadsheets. Nowadays, there are several software packages forensic experts use to create spreadsheets. While some will only perform the basic spreadsheet-making tasks, others go beyond, performing complex data management tasks. Not only do forensic auditors create spreadsheets, but they analyze them also. Their knowledge of spreadsheet analysis will come in handy when they analyze the financial records of their target organization or individuals.
Identifying assets and tracing funds
When it comes to “following the money”, only a few professionals come close to forensic auditors. They know the significance of tracing funds and assets and how it can lead them to the potential fraudster. Thus, they dedicate their time and apply all their skills and resources to track these assets. When the task becomes difficult to handle alone, forensic experts call for backup to find inconsistencies. To do this, a high level of digital intelligence that involves programming and computer know-how is vital.
Skills and Qualities to Become a Forensic Auditor
Fraudulent activities and malpractices in organizations, businesses, and among individuals will never ease. Thus, as a forensic auditor, you need to have skills that will help you keep up with the high demands of the job. Here are some of the vital skills and qualities you need for the job:
The temptation to practice falsehood as a forensic auditor is huge. It is because forensic auditors are meant to spot financial inconsistencies and foul play. Those linked with financial crimes have a lot to lose including money and reputation if they are found guilty. Sometimes, some individuals intend to hire forensic auditors to cover their tracks of fraudulent activities. Thus, some individuals or professionals may intend to bribe forensic auditors. It is usually a tempting offer. However, forensic auditors could lose their license or face jail time if they agree to perjury. Therefore, it takes someone with ethics to excel as a forensic auditor.
The corporate world is littered with intelligent people who commit fraud. Not only do they know unethical tricks to commit fraud, but they also know how to cover their tracks. Thus, it takes a critical thinker to spot some well-executed forms of malpractices. Critical thinking helps a forensic auditor to approach the task at hand from the perpetrators’ point of view. By thinking like a potential fraudster, it makes it easier for a forensic auditor to know the right steps to take.
One of the most vital skills in forensic accounting is communication. There are many cases where forensic auditors would need impeccable communication skills to carry out their duties expertly. Starting with verbal communication, a forensic auditor must be eloquent. Not only does this make him or her seem more assured, but it also makes them command respect. Since part of a forensic auditor’s responsibilities involves testifying in court when necessary, it pays to be articulate. Also, a good amount of composure is needed to avoid getting bullied. Besides verbal communication skills, written communication skills are vital as well. A forensic auditor gives reports and prepares spreadsheets and other formal documents that are tenable in court. Thus, the written communication skills of a forensic auditor should as well be top-notch.
The presence of forensic auditors can make people uncomfortable, especially those who have something to hide. Apart from the discomfort, some might feel, there are other worrying signs to look out for. Being inquisitive is a proven skill that will enable you to look at the right places and ask the right questions. This will make people accidentally disclose information they were trying to hide. With time and persistence, inquisitiveness will yield results.
In virtually every profession in the 21st century, digital intelligence is a non-negotiable skill. The same applies to being a forensic auditor. From sending messages to carrying out daily tasks, data is processed at a high-speed rate in forensic accounting. Thus, to perform your duties expertly, you must be well-versed in the knowledge of gadgets, software, and the internet as well. You will only be able to perform the responsibilities in your job description with solid computer skills.
A forensic auditor has a tough task in his or her hands when dealing with people. One of such tasks is asking questions that can make others uncomfortable, albeit necessary. You need top-level interviewing skills to be a top forensic auditor. Also, you must know how to interview people without abusing your power. The court decides who is guilty of fraud and who is not. Therefore, the essence of such an interview is to gather facts not accuse people without cause or evidence. Not only should you know how to interview people expertly, but you should also know how to be interviewed. The court hearings you attend will involve answering questions about your financial investigations. Thus, this skill goes both ways.
How Much Do Forensic Auditors Earn?
Forensic auditors earn a decent salary anywhere in the world. The expected salary depends on factors like skill, qualification, and experience and it varies across different regions. Fresh graduates in forensic auditing would expect a median salary of about GBP22,000 while experienced forensic auditors will earn between GBP28,000 and GBP82,000 in the United Kingdom. In the United States, the average salary of a forensic auditor is $74,000. Meanwhile, in South Africa, a forensic auditor with a fair amount of experience will earn an average salary of ZAR320,000. In Nigeria, forensic auditors earn a monthly salary of around NGN190,000 on average.
Where Can a Forensic Auditor Find Work?
As far as employment goes, forensic auditors are in high demand, especially the exceptional ones. Forensic auditors can be hired by government agencies, financial institutions, sports clubs, and other organizations. In some cases, corporate businesses hire forensic auditors as self-employed professionals on a short-term basis. Besides being self-employed professionals, forensic auditors also get hired permanently by top accounting firms. Virtually every growing establishment needs the expertise of forensic auditors, including non-profit organizations. This is because every establishment that receives funds tends to get taken advantage of by those within. Also, individuals and small groups like families, and spouses, occasionally require the services of forensic auditors, especially during a divorce or cases of bankruptcy. Therefore, there will always be businesses, organizations, and individuals who need the help of forensic auditors.
In the corporate world, there are some sophisticated professionals whose jobs revolve around large numbers and big names. A forensic auditor is such a professional. Forensic auditors are in high demand and they earn a decent salary with bonuses. It takes a list of skills, in-depth knowledge of accounting and financial records, and the right qualifications to become the finished article.