Himanshu Sarpal is currently a Senior Consultant in Forensic Accounting and Investigation Services of Grant Thornton, India.
He holds a Bachelors Degree in Commerce from the University of Delhi and a Chartered Accountant degree from Institute of Chartered Accountants of India (ICAI).
He is very active on Linkedin. You can connect to him here.
Forensic Accounting / Auditing
- Where there are questions about financial transparency, legitimacy, or shenanigans, you’ll find a need for Forensic Accounting/Auditing.
- For example, ABC & Co., on the recommendation of its Chief Operating Officer (COO), entered into a contract with XYZ & Co. for the supply of Product X. At the time, XYZ & Co. was not authorized to conduct business, as its license was suspended due to certain irregularities in taxes paid. The COO had knowledge of this fact but still recommended that ABC & Co. enter into a contract with XYZ Co. because he was secretly receiving compensation from XYZ & Co. for doing so.
- Forensic Audit can reveal cases of potential fraud as mentioned above.
Role of a Forensic Accountant
- The requirement of Forensic Audit comes due to a high rate of white collars crimes all over the world like – Manipulated financial statements, vendor favoritism, dummy vendors/customers and other wrongdoings.
- So the role of a Forensic Auditor is to investigate upon such matters done by the various perpetrators be they are internal or external persons.
- Moreover, it also helps the regulatory bodies like RBI, SEBI, MCA, SFIO etc., to investigate the matters where the need of forensic auditor is required.
- Recently, RBI has also issued a circular which states that high-value borrowers mandatorily comes under the purview of Forensic Audit.
- So you can imagine the need for Forensic Audit/ Accounting in India.
Is it necessary for one to be a Chartered Accountant (CA) to be a Forensic Auditor
- It is NOT necessary for one to be CA to be a Forensic Auditor.
- Every forensic team consists of professionals from diversified areas.
- An ideal forensic team consists of- CA’s, Engineers, MBA’s, MBE’s, Lawyers, Semi Qualified Chartered Accountants, other professionals and fresh graduates as well.
- Forensics is not only checking of accounting records/Financial statements it has a wider range of services like Business Intelligence, Investigation, Asset Tracing, Anti-Bribery Measures, Dispute Resolution Mechanism, Brand Protection and a lot more.
Mid-sized firms in Forensic Auditing / Accounting
- It is a total a myth that forensic practice can be set up only the top CA firms.
- In India, various mid-size CA firms are doing a great job in the field of Forensic Audit/Accounting.
Opportunities for Forensic Auditors/Accountants
- Nowadays, since processes in every organization are technology driven, almost all the organizations have set up their own Risk Assurance Department which works hand in hand with the third party Forensic Auditors.
- One of the areas these teams look after is to investigate the matters/complaints made through the anonymous whistleblower letter in the organization.
- There are many organizations which also have their in-house separate Forensic Audit Team.
- Forensic Accountants/Auditors also helps investors do their due diligence, analyzing deals to check out potential fraud. They investigate bankruptcies, mergers, and acquisitions, to make sure all parties involved are showing their cards.
- Forensic accountants help law firms in divorce cases, dragging out any financial skeletons in the closet. They also work in insurance companies verifying whether claims are legitimate etc.
Experienced as a Forensic Auditor/Accountant and wants to move to another profile
- The modus operandi used by fraudsters is new to the Forensic Auditor, which ultimately creates a challenge for the forensic auditor to crack the case in the best possible manner. Thus the job of an FA is not monotonous. So people usually enjoy being a Forensic Accountant/Auditor.
- To answer the question – Forensic Auditor/Accountant can move into a Risk Advisory Department i.e., Internal Audit division of any organization.
Forensic Accounting scope in other countries
- The emergence of Forensic Audit in India comes from other developed countries.
- So, scope-wise it is one of the emerging areas for finance professionals in India as well as outside India.
- In fact, in the US and other developed countries, there are other careers you can get into with a forensic accounting degree or forensic accounting experience. They are as follows: CIA Analyst, Criminalist, Expert Witness, FBI Agent, Fraud Investigator, ICE Agent, Insurance Claims Investigator, Legal Consultant, Private Investigator etc.
Certified Forensic Accountant
- Unlike many other professions, there are no official education requirements for Forensic Accountants.
- Mostly many Forensic Accountants / Auditors are Certified Public Accountants (CPAs) and Chartered Accountants (CA).
- Other related certifications also include Certified Internal Auditor (CIA).
- However, gaining the need for Forensic Accounting / Auditing – Various Forensic Accounting Degree Programs are offered by the different Institutes in India and abroad. Anyone pursuing these Forensic Accounting Degrees can get a good idea on detecting frauds.
- There are other International courses also available to be Certified Forensic Accountant. From what I have heard of the most famous ones are – Association of Certified Fraud Examiners (ACFE) – Certified Fraud Examiner (CFE), National Association of Forensic Accountants and Institute of Certified Forensic Accountants.
- The Institute of Chartered Accountants of India (ICAI) has also started one certification course – Certificate Course on Forensic Accounting and Fraud Detection.
Skillset for a Forensic Accountant / Auditor
In my personal opinion, the following qualities would be needed:
- Detail oriented
- Ethical (Personal relation and emotions cannot be allowed to influence any aspect of forensic audit)
- Must see things beyond the books and must be Curious
- Confident: Presence of Forensic Accountant/ Auditor is not always appreciated as the outcome of their efforts could have legal serious repercussion. This, in turn, calls for an individual of unshakable confidence and conviction.
- One must be aware of current affairs of the economy.
- Enough patience, because sometimes it takes a long time to detect the modus operandi of the fraudster.
- Must be team players – As they are likely to work in environments where they must collaborate with other professionals.
- Never Give Up Attitude
Day in the life of a Forensic Auditor
- To be a forensic auditor, it involves a lot of client interaction to understand the policies and processes of the organization so one could Discover and analyze things.
- Most days we have meetings with top management of the organizations. Thus giving one immense exposure of client interaction and understanding of the point of view of different people.
- So our day consists of a lot of Discovery and Analysis (examining the evidence)of the things we have discovered.
- All we have discovered and analyzed needs to be reported. So reporting is also another important part of my day.
- Every new day is a challenge for me to give my best to the organizations with whom I work.
Interview Tips for a Forensic Audit Role
- One must be aware of what exactly is Forensic Accounting/ Auditing and how it differs from other fields of auditing.
- Must be aware of various sections of Companies Act 2013, which deals with forensic audit and frauds. For example, Section 447 which defines the meaning of fraud.
- Must also have knowledge about – Other laws like Prevention of Corruption Act and Insolvency and Bankruptcy Code, 2016.
- Must have theoretical knowledge of Market Intelligence, IBC Act, FCPA and UK Bribery Act. Must also know about various financial statement frauds in India and outside India and current affairs of the economy, as a lot of frauds have been reported by the media of our country in past few months.
- To be a forensic auditor, as I mentioned above, a lot of client interaction is involved in the profile, one must have good communication skills whether in English or Hindi.
- In our society, our knowledge is judged on the basis of our English speaking capabilities but trust me if you have proper content/knowledge you will be confident to speak to anybody on any given topic even in Hindi.
- Knowledgeable with various computer software programs, including Microsoft Word, Excel, and PowerPoint, for the purposes of gathering and analyzing information.
- Job candidates will need to learn online researching skills and the use of database management and analytical software
You can reach him at firstname.lastname@example.orgemail@example.com