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FORENSIC ACCOUNTING

Survival of the Analytically Fit: The DNA of an Effective Forensic Accountant

 

By Charles Davis, CPA, Ph.D., Suzanne Ogilby, Ph.D. and Ramona Farrell
AUGUST 2010
Forensic Accounting

If attorneys could engineer the perfect forensic accountant, 78% of them would choose an accountant with strong analytical abilities. In a 2009 survey commissioned by the AICPA, after analytical skills, attorneys chose, in descending order, the abilities to be detail-oriented, ethical, responsive and insightful as the remaining top five essential traits for forensic accountants.

 

CPAs look for a slightly different profile. Like attorneys, CPAs ranked analytical abilities as the No. 1 desired trait for forensic accountants. But they rounded out the top five with the abilities to be inquisitive, detail-oriented, ethical and skeptical.

 

The survey report, Characteristics and Skills of the Forensic Accountant, identifies perceptions of the core skills needed to be an ideal forensic accountant and how to build these skills, as well as common pitfalls that hinder how effectively forensic accountants work. The online survey was directed to: attorneys who employ the services of forensic accountants; CPAs who are primarily working as forensic accountants; and accounting and auditing professors. Responses were received from 126 attorneys, 603 CPAs and 50 professors.

 

When asked to rank the areas of specialty needed for forensic accounting services, almost 90% of attorneys indicated they needed forensic accountants most frequently in cases involving financial statements, followed closely by economic damages and fraud. CPAs said the largest share of their forensic accounting work involved fraud work, only slightly edging economic damages, followed closely by valuations. The survey results highlighted communication skills as being key to the success of the forensic accountant. Being an effective communicator includes the ability to simplify information, articulate key issues, and potentially present deposition or trial testimony.

 

Fifty-three percent of attorneys signaled a need for computer forensic analysis, yet only 7.6% of CPA respondents said they specialize in this area. This divergence may reflect the “newness” of the area. Although a forensic accountant may partner with an expert in computer forensics, the survey results suggest that everyone in the field should have at least a minimum skill level for analytical work in this environment.

 

The findings from three of the areas explored in the survey are summarized in the following charts. (Click links below to open charts in a new window.) Findings beyond those presented can be found in the full report available for free download at AICPA.org.

 


 

Charts:

 

Core Skills

Overall, communication skills are key to the effectiveness of the forensic accountant and should be emphasized.

 

Enhanced Skills

The need to be analytical in a forensic accounting engagement may be the most important overall characteristic, without which other traits and abilities would be difficult to develop.

 

Potential Problem Areas for Forensic Accountants

The results highlight the importance of communication as a core skill for the forensic accountant and areas that are opportunities for improvement.

 


 

Charles Davis is a professor of accounting at California State University–Sacramento; Suzanne Ogilby is senior associate dean and professor of accounting at California State University–Sacramento; Ramona Farrell (rfarrell@ueltzen.com) is managing partner at Ueltzen & Company LLP.

 

To comment on this article or to suggest an idea for another article, contact Loanna Overcash, senior editor, at lovercash@aicpa.org or 919-402-4462.

 

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