Times are changing in the forensic accounting space. Clive Hudson CA, principal forensic accountant and electronic forensic investigator at New Zealand’s Serious Fraud Office, recalls a time when he would be part of a team that would carry out searches of business offices and leave with a filing cabinet full of potentially damning documents.

“Now, I haven’t seen a filing cabinet for years,” Hudson says. “People just don’t use paper anymore. Forensic accounting today is very data driven.”

It means people like Hudson, whose job includes employing forensic accountants to ensure the organisation is always ready for when business turns bad, are searching for people with very specific skills.

It’s the same in Australia, says Gary Gill CA, managing director of Kroll, a cybersecurity firm that offers investigation, data analytics and regulatory compliance.

“There are plenty of forensic accountants around, but it’s always difficult to find experienced people,” Gill says.

“It’s important that we find people with the right background and experience because you’re not just doing accounting. You’re dealing with people who are in very stressful, difficult situations, often involved in major lawsuits or criminal investigations. Being able to stay calm and deal with people in that kind of environment is important.”

The forensic accounting sector will be hungry for talent over the coming years. According to a report from Moore Australia, the global forensic market should reach US$5.81 billion in 2024, but is expected to grow to US$7.95 billion in 2028 – a compound annual growth rate of 8.1%.

That growth, the report says, will be a result of:

• the rise in cybersecurity threats
• a stronger focus on preventing fraud
• increasingly complex financial transactions
• increased regulatory security across industries.

So, what are the skills the forensic accounting sector is looking for? We speak with three experts to find out.

EXPERT: Gary Gill CA, managing director, Kroll

SKILL 1: Technical accounting skills

The better forensic accountants have been through the CA ANZ Forensic Accounting Specialisation Program, or an equivalent, and have a strong background in auditing. This gives them a good grounding in how business operates and teaches them the importance of process and internal control. Even if a person is a very good investigator, if they don’t have that business background, they’re missing something.

SKILL 2: Interpersonal skills

Your ability to listen is really important. During investigations, you’re doing interviews with people who have either engaged in misconduct or people who know something about the issue you’re investigating.

Knowing how to conduct an interview, and listening to people to make sure you don’t miss anything, is really important.

That’s why an auditing background can be important because, as an auditor, you’re taught to listen, be sceptical and not simply accept information at face value. Inevitably, you’re developing those sorts of interpersonal skills as an auditor. It gives you a good start in that process.

EXPERT: Matthew Ashby CA, partner, McGrathNicol

SKILL 3: A second degree or specialisation

When it comes to education, some specialist forensic accounting courses are available. Typically, candidates will come from a commerce or business degree, specialising in accounting or finance.

A second degree or specialisation is highly desirable. I graduated with degrees in commerce and law, for example. While not essential, the legal knowledge has been highly valuable. After all, the word forensic means ‘pertaining to the courts’. Given the legal aspects of disputes and investigations, it is helpful to understand legal procedure and rules of evidence.

But the second area of knowledge needn’t be law. It could be a strong tax background, data skills, IT knowledge, or a number of other areas.

SKILL 4: Attention to detail and communication

The stakes are high in many forensic accounting matters and the consequences for people on those matters can be quite serious. So, a high level of care and attention to detail is crucial. Near enough is not good enough.

Communication skills are important because the results of our work need to be clearly communicated to the court, regulators, or to corporate decision makers, so they can make the right decisions based on our work.

Sometimes, that is about presenting something that is complex in a simpler way, but as clearly as possible. And sometimes, rather than glossing over complexity and uncertainty, it’s important to recognise those factors and explain how they affect your findings or opinions.

EXPERT: Clive Hudson CA, principal forensic accountant and electronic forensic investigator at New Zealand’s Serious Fraud Office

SKILL 5: Data analytics

I’ve been here since 1996 and, while we’re still dealing with the same kind of fraud, we’re now in a much more connected world. There is now an ability for people to operate globally.

This creates some challenges, but also creates some opportunities because sifting through boxes of paper was quite difficult and time-consuming. But there is technology that can assist with sifting through vast amounts of data and people who understand data are highly valued.

SKILL 6: Inquisitive mindset

People in this field must have what I call an inquisitive mindset. They’re not ticking boxes. There’s not even a checklist. It’s about looking for outliers, seeing what’s missing.

A good forensic accountant in some ways is like an investigator or police officer. You’re pulling threads, but you’ve got to know what it all means in an accounting sense.

Often, you’ll pull a thread and there’s nothing there. But other times, you pull a thread and there’s a big mess at the other end.

So, it’s a mindset. It’s about seeing things that might not otherwise have caught your attention. For example, if you’re seeing a whole lot of transactions through a suspense account in an established business, does that really make sense?

We really do need people in forensic accounting with professional scepticism and an investigative, inquisitive mindset.

The next intake for the CA ANZ Forensic Accounting Specialisation Program is in October 2024. Pre-enrolment closes on Monday 7 October 2024; online course commences on Wednesday 16 October and concludes Wednesday 4 December 2024.