There’s a growing need for forensic accountants globally – and the UK is at the forefront of this expansion.
So why has the profession been rapidly rising over the past two decades? We asked some insiders the leading questions.
There are several key reasons why demand for forensic accountants is increasing, and these factors are likely to remain consistent for the foreseeable future. The first is that there is “a significant increase in corporate fraud cases, due to the upwards trend in government spending on anti-money laundering systems in recent years,” according to forensic accountant recruiter Louise Bridge, Business Director, Public Practice at Hays Senior Finance. As a result, “forensic accountants are frequently required internationally – and this is especially so in the case of environmental disasters.” Forensic accountants come in “to look at the affected company’s business projections and to assess competition in the area, with the aim of adjusting claims either to a more realistic level, or a more optimistic one.”
Secondly, the rise has come from our development as a society towards a more litigious corporate culture. “In a buoyant economy more transactions take place and this inevitably leads to more capacity for dispute,” says Bridge. “And in a declining economy there is more potential for fraud, plus companies are more likely to seek to recover lost value from failed transactions.” So whichever way our turbulent economy is heading, more litigation is likely to be the result.
And thirdly, the UK is a hub for forensic accountants because of our well-developed financial and legal services industries, which create significant job opportunities. “London leads the way,” says Bridge, “while the other major hubs are Birmingham, Manchester, Leeds and Glasgow. International opportunities are particularly widespread with the Big Four firms,” she adds, “with high demand in the CIS/Eastern Europe and offshore destinations.” Increased globalisation means more cross-border work being created – as this is complex work, it puts forensic accountants in a strong position because more and more demand is being generated.
The Partner’s view
The demand for forensic accounting “has increased significantly over the past 10 or 15 years,” says Gavin Pearson, Partner at forensics firm HSNO, “due both to the development of the industry as well as people becoming increasingly aware of the services that forensic accountants can provide – whether in relation to fraud or disputes.” For example, Pearson says, “if a large company identifies a fraud, it would be likely to want to instruct external forensic accountants to undertake an investigation.” Similarly, “solicitors understand the tangible benefits of instructing forensic accountants to deal with liability or quantum issues on relevant cases.”
What kind of cases are we talking about? “There’s a large volume of interesting, varied and challenging work to be undertaken by forensic accountants,” Pearson says. “Unlike areas like accounts preparation and audit, each forensic accounting assignment is a one-off and unique engagement – meaning there is a good opportunity for people to develop their skills and advance their careers whilst working on different and interesting work.” It’s worth adding that there is great job satisfaction to be found too. “Many of the cases are high profile and reported in the media and your work can end up being used in Court.”
For Pearson, “the key skills required to be a forensic accountant are the ability and confidence to be able to deal with and analyse large amounts of information (both financial and non-financial), the ability to think independently and the ability to present and communicate information clearly, whether in written or oral form.” To progress in the longer term, Pearson says, “you need the credibility to be able to generate work – given that all matters are one-off assignments.”
Getting under the skin
There’s a fourth reason why forensic accounting has increased so much in such a short space of time – and that’s due to technology. “It’s a relatively new area of accountancy,” says Vikki Wall, a forensic accountant and Partner at Haberman Ilett LLP, “becoming prominent in the 1990s. When I worked for EY there were 20 people in the forensic accounting area – when I left, there were more than 200.” The reason? “There’s a lot more IT, and this means a lot more email and electronic disclosure. So if you do a very large case, there will be a huge amount of disclosure to review – it’s all electronic now and it was paper in the past.”
This is particularly so for cases taken on by the Big Four. “They have committed a lot of time, money and training on technical training for IT professionals.” Wall says. In her view, “the role has changed in the last 20 years – as has the nature of disputes. When I first started there were lots of large corporate negligence cases – to take the most famous example, Polly Peck. There was lots of litigation and lots of high court work.” Nowadays, Wall says, “we tend to get arbitration rather than litigation.”
And for the future – will demand continue to grow at the same rate? “I don’t know whether Brexit will change things,” says Louise Bridge, “but the London High Court is seen as the place for high-up individuals from abroad to settle their disputes.” Complex cases get settled here, Bridge argues, because of our expertise – “the combination of a very sophisticated judicial, legal and accounting system makes for an attractive set of factors.”
As a result, for individuals wanting to distinguish themselves as forensic accountants, a significant advantage would be to sharpen your second or third language. “If you can speak Russian, German, Arabic, Mandarin and occasionally French – these are very real skills to have to differentiate yourself as a forensic accountant.” So much of the work is cross-jurisdictional, Bridge points out – “it might involve three or four different legal jurisdictions all at once, especially in offshore work which is very complicated.”
The bottom line is that forensic accounting is “a massive growth area. I first recruited into it in 2001,” says Bridge, “and today it’s easily three times the size it was then.” This growth is “hard to quantify by people or firms – but we are such a litigious society nowadays, it is only going to continue.”
As in so many things, “the US has led the way,” Bridge says, “and we have followed.” Whether that is good for society or not is a moot point – but for forensic accountants, the future is very healthy.
Mark Blayney Stuart is Business Journalist of the Year, Wales Media Awards 2017 and Former Head of Research at the Chartered Institute of Marketing.