Forensic accounting is a combination of accounting, auditing, and investigative skills, all used to probe the financial records of individuals and businesses. But what, exactly, does that mean? And what, exactly, does a forensic accountant really do on a day-to-day basis?

We asked Everett Colby, CPA, CGA, a litigation / forensic accounting partner with Colby McGeachy, PC, for the scoop.

Thanks for taking the time to speak with me. Can you tell me about how your desingation provides the skills necessary to get into forensic accounting?

From a very general point of view, there are certain attributes that any forensic accountant must have. Those attributes primarily being an investigative mentality, a knowledge of the law, as well as an in-depth knowledge of how to extract evidence from numbers. And that extraction of evidence from numbers is exactly what auditing is.

When one is trained to be an auditor, one learns how to draw conclusions based on samplings of numbers and what they tell you, so it's interpretive in that way. That skill was extremely well-taught in the legacy CGA program, [but it] doesn't necessarily give someone all the skills they need to be a forensic accountant.

There are two primary people that tend to make good forensic accountants. [The first type are] accountants, because of their audit knowledge, training and [their knowledge of] ethical behaviour. As accountants, we're bound by'and very well adept at'the ethical side, the auditing side, and interpretive side.

The other group who make good forensic accountants are police officers, because they've learned the criminal code and interviewing side [of the job] through their training. I know many police officers who took the legacy CGA program to become a well-rounded forensic accountant.

As an accountant, we're not really taught well in the interviewing side, and so more often than not, that's a type of course or professional development that an accountant would take to round out their experience to become a good forensic accountant.

Is forensic accounting specifically something individuals can get right into, or do you have to apprentice and work your way up?

Forensic accounting is really a specialty. And the more exposure and experience you obtain, the better your chances are. Most forensic accounting is not done by the individual'there are often teams that work on a particular project, depending on its size and nature.

Over the years I've been asked about how to get into forensic accounting. I teach a course on this. I've also been a member of the board for both Seneca College, in Toronto, and Algonquin College in Ottawa, where I live now, who have developed their own forensic accounting specialty certificate programs.

I don't personally believe that, just because you are a designated accountant, you can automatically do forensic accounting. There's still more you need to learn to get into a specialty or a niche. But there's not much, because as I said you have three quarters of the foundation necessary to be able to do it.

Generally, the best thing you can do is to go to work for a firm.... Insurance companies can also provide [experience], and the banks can provide a good training ground as well because they have such large internal departments to deal with this kind of issue.

Forensic accounting is one of the most popular fields among students. Can you give us a day in the life?

It's not the type of work where you can leave it at the office. As with any kind of investigative work, when you start the job, you don't necessarily know where it's going to end, because you don't know what you're going to find as a result of your investigation.

You have to feel comfortable dealing with an environment that has uncertainty in the work that you're doing. In my opinion, you need a pretty thick skin. And I say that because, generally, an investigation will have two sides to it. There's the initial investigation that you may be asked to do. But if the person ends up getting charged or sued because of your findings, there's going to be another forensic accountant who tries to show that your work is no good, and shouldn't be believed in.

So, you need to feel comfortable with the whole courtroom experience. Your work is challenged way more frequently than normal accounting work. You have to really really keep the ethical nature of your work in mind. Because when you're investigating, you're typically investigating an individual or group of individuals. Your work can have a huge impact on that person's reputation and life, so you can't take that lightly.

So the impact of your work can have a much greater effect than the impact of normal accounting work. You're often working in a more adversarial type of environment than working on behalf of a particular client that has retained you, and even though you are retained, one of the things we always advise the company or individual that's retaining us is that we don't know what the answer is going to be. To ensure that our work has credibility, we will be reporting out on whatever we find. It might not be what you think. Because if a company feels they've been defrauded, they expect that your work is going to show that they were. But our work is primarily flushing out the facts. Our reporting does not say "Dan is guilt of something." It's basically a summary of the facts, and like a good book, the facts should make the conclusions self-evident.

Excellent, thanks so much.

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