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Bean counter of a different kind

Wednesday, October 12, 2011

With the advances in science and technology, it has become possible to make use of scientific methodologies in otherwise routine processes. Forensic accounting is a profession that combines the uniqueness of forensic sciences with the complexity of accounting. Mayur Joshi, a forensic accounting professional, speaks to Sharda Iyer, shedding light on this relatively new profession

For someone who has been involved in the profession for the last decade, Mayur says he entered the profession quite accidentally. “I am a Chartered Accountant and while performing an audit, encountered some transactions which were indicators of fraud. To prove the fraudulent transactions, it became necessary to collect evidences to prove the fraud to my superior, which created the interest in the accounting investigations.”

When asked to exposit about forensic accounting and its requirement in the present scenario, Mayur says, “Forensic accounting is an analysis of financial evidences helping in litigation or potential litigation or solving matters pending in the court of law.”

In this context, he exemplifies about the subject with a comparison between the United States and India. He says, “In India, forensic accountants are predominantly used by corporate or regulators, whereas in the US, individuals also take help from forensic accountants for divorce settlements and other family matters.”

When asked to talk about the different specialisations available in the field, Mayur dilates that while forensic accountants do not have specialisation per se, forensic accounting can be two varieties namely litigation support and investigative accounting. The former is ordered directly by a court of law, while the latter can be initiated at the behest of anyone who has law enforcement powers.

Thus he says, “Apart from corporate and government regulators, revenue authorities like the IT department, Sales Tax department, police authorities and even investors can call upon investigative forensic accounting.”

In terms of its applicability, Mayur expatiates, “There are many areas where help of forensic accounting can be taken to settle disputes like in the banking sector, pharmaceutical sector, insurance, telecom and the automobile industry.”

Regarding the requirement of forensic accounting in the present times, Mayur states, “Awareness about securing one investment is growing. There is also the RTI, but only by knowing that a fraud has occurred, action cannot be taken; foolproof evidence needs to be there.” 

This is why he states that while the demand for forensic accounting was not much earlier, in the days to come, it will increase by leaps and bounds. “The demand for forensic accounting is growing due to the recent scams in the corporate world. As more and more number of frauds is exposed or potential frauds are suspected, the demand for forensic accounting will increase,” he puts forth candidly.

When asked to talk about the educational requirements for a person to get into the field, Mayur states that a Bachelor’s Degree, irrespective of the stream, is the minimum required educational pre-requisite to be eligible to take up forensic accounting followed by a one year Certified Forensic Accounting Professional (CFAP) program. 

He is however quick to point out that gaining the CFAP certification is not the be all and end all for a forensic accountant. “One has to fulfil the requirements of 20 CPE (Continuous Professional Education) hours, which means that one has to contribute to the development of the community by providing or taking education, understanding new trends in frauds and forensic accounting,” he explains matter-of-factly. The CPE credits are awarded by the United States’ State Board of Accountancy which awards a maximum of 30 credits in a year. 

As a forensic accountant, Mayur says that the career opportunities available to an individual are quite many. He states that while an individual can opt to work for institutions and companies or even start one’s own venture, opportunities to spread the knowledge around through training are also gaining in stride. “As a forensic accountant, training opportunities are also growing as more and more banks; telecom and insurance companies are looking to train their professionals on latest techniques and trends in frauds.”

In terms of the job opportunities available, Mayur is also quick to caution that being connected with the right network of people is important in this profession. “One has to be networked in the proper community as very less jobs will be posted in the job forums,” he states unequivocally. 

Talking about the pay-scales offered to an individual involved in this profession, Mayur states that the lack of skill-set available at present, results in huge pay-packages being offered to the existing forensic accountants. He says that on an average the starting pay-scale could be anywhere around seven to eight lakh rupees, while professionals “at the helm of affairs” could command anywhere over a crore as their yearly pay-scales. 

As a final thought, Mayur chooses to expound on the basic interest of an individual while taking up this profession. He puts forth, “Those who are passionate about fighting frauds should definitely take up this profession because it requires a financial acumen, a lot of time and patience and an investigative mind-set. In the absence of these qualities, choosing to become a forensic accountant is a risky career choice.”

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