Do you have the right stuff to work in fraud, forensics and litigation support? In today’s firm or company, there are many accounting career opportunities in niche practice areas, and one of the most interesting of all of these is fraud.
Meet Marc Filer, CPA/ABV, CFE. Based in Washington, D.C., Marc is a senior associate in PricewaterhouseCoopers' Global FCPA (Foreign Corrupt Practices Act) practice, and works on matters involving the SEC and the U.S. Department of Justice. In addition to working on FCPA projects in India, the United Kingdom, Japan, China, Italy, Russia, and the Czech Republic, he has been involved with several large investigations involving financial statement frauds, revenue recognition issues, and asset misappropriation.
We sat down with Marc during the August E.D.G.E. Conference in New Orleans to get his thoughts on the kind of background and competencies it takes to succeed in forensics, as well as his views on how the accounting profession can help young CPAs succeed.
Edge: What is it about “fraud” that drew you to this service offering?
Marc Filer: While I liked my auditing and tax classes, I felt there had to be something else out there, but I did not know what else an accountant could do.
I was first exposed to Forensics while at Ohio University. A PwC Forensic Team visited the campus to test a new class they were developing to teach to new hires. During this class, I knew this is the type of work that I wanted to do in my career. Forensics combined the various disciplines that I was studying in college (Accounting, Finance, and Business Pre-Law) and challenged me to think outside the box. During my internship, I was exposed to the many different types of forensic accounting services, including investigations and litigation support.
Since starting my career full time, I have been exposed to even more services, including royalty audits, contract compliance, asset misappropriation, revenue recognition, the FCPA, and valuation. The variety of potential work is another reason I was drawn to forensics. Once the fundamental forensic knowledge is gained, there are so many specialized areas that I have not stopped learning since leaving college!
Edge: What kinds of competencies would a young CPA want to have to consider a career in forensic investigation or litigation support?
Marc Filer: If a young CPA is interested in considering a career in Forensics, I would tell them it’s a great choice. There are many competencies a forensic accountant needs; in fact, the Forensic and Valuation Services (FVS) Section of the AICPA has a white paperthat covers this, “Characteristics and Skills of the Forensic Accountant.”
The most important competency is communication skills—oral and written. A forensic accountant needs to be able to communicate in an effective and efficient manner. Whether you are interviewing an individual involved in a potential fraud or communicating your findings in a written report, communication is key.
This leads into what I consider the second most important competency, being detail oriented. In many of my engagements, the team was given the "kitchen sink of data." As a forensic accountant, you need to be able to analyze the data in an efficient manner, and determine what data is important and what data is not.
For example, in one engagement, the client gave us receipts received from an employee over the last year. The client believed the employee was committing fraud in his expense reports. I led a team that analyzed and documented each invoice in detail, and it was only then that we were able to determine that many of the invoices had sequential numbers (with many weeks in between invoices), and that the handwriting for all the invoices was all the same, even though the name on each invoice was different. When we confronted the employee with the detailed analysis and documentation, he knew that he had been caught and pled to the scam.
The last competency a forensic account should have is adaptability. While planning before starting an engagement is very important, once you are out in the field, the situation might change and the forensic accountant must be able to adapt. There have been many times that I have been in a middle of an engagement and the information is telling us something different than what was originally thought to be the issue. At that point, the forensic accountant must be able to step back; look at the information; and reassess the workplan, the issues, and the client expectations. Being able to do this successfully is very important to you and your clients.
Edge: Do you consider this line of work a gateway to other kinds of accounting work?
Marc Filer: I would consider forensics a gateway to various positions and opportunities that people would not think of when you say "accountant." With a background in forensic accounting, there are many opportunities, including working in a law firm as an internal forensic expert; in industry within a company's compliance or internal audit group; or the local, state, and federal government (for example, as a special agent with the FBI or an Office of Inspector General). Related areas include computer forensics, family law, valuation, bankruptcy, and economic damages calculations.
Edge: Take us through one of your recent engagements so our readers can get a sense of what’s involved in working on an investigation.
Marc Filer: One of the things I love about forensics is that no two engagements are exactly the same. One of my last engagements took me to India. Before leaving the United States, the engagement team developed a workplan and document request list based on the information and allegations provided to us by the client. Then, each team member was assigned portions of the workplan and the document request list was sent to the client. The client then sent us its employee list, financial information, and other information that was requested based on the document request list. The engagement team analyzed and documented the information. We determined who we wanted to interview, along with the transactions we wanted to examine.
Once onsite (after 16 hours in two different airplanes!), we executed the workplan. A portion of the team looked at the financial transactions that were selected before coming onsite and the other team members conducted the interviews of the employees. The team looking at the financial transaction analyzed the supporting documentation (invoice, purchase order, wire transfer/check, journal entry) to determine if the transaction supported the actual business transaction. The team conducting the interviews by meeting with employees from finance, sales, and operations, asked about internal controls, business practices, company policies and procedures, and their day-to-day tasks. At the end of the engagement, the team uncovered that the controller of the plant was stealing from the company via expense reimbursements and salary payments with the assistance of two other members of the finance and operation team.
Edge: You're a member of the 2010 AICPA Leadership Academy. How did this program help you as an accounting professional? How did it help you personally?
Marc Filer: The AICPA Leadership Academy was an amazing experience. On a professional level, it helped me further develop my critical thinking and soft skills, which are very important in forensic accounting. The experience also gave me an appreciation for what the AICPA and state societies do for the profession, and how important it is to actively participate in committees and boards of those organizations. It also gave me a chance to connect with young CPAs across the country. These individuals are a great support structure both professionally and personally, whether working on the same committee, asking a quick accounting question about an issue I am facing, or being able to get together for dinner and catching up about the family.
Edge: It seems AICPA is focusing more and more on the “Young CPA,” especially with the E.D.G.E. conference. Tell me a few ways the accounting profession can support the young CPA.
Marc Filer: At this first conference, there were more than 100 young CPAs from across the country who attended. I have been to various AICPA conferences throughout my career, but it was a great feeling to see so many young CPAs in one room.
I believe that the number one thing the accounting profession can do to support young CPAs is to continually support our development. The accounting profession also can support young CPAs by assisting with "knowledge transfer." I have met so many experienced CPAs who were willing to share their knowledge and experience. By listening and learning from more experienced CPAs, younger CPAs can gain insights and indirect experiences that will help them excel in their careers. Another similar way to support young CPAs is through mentoring. I know it has helped me develop as a CPA and further my career because I have great mentors, and yes, you can have more than one!
AICPA’s CFF Credential
Recently featured in the September EDGE newsletter, the AICPA’s Certified in Financial Forensics (CFF) Credential was created for CPAs who specialize in forensic accounting. The CFF encompasses skills in bankruptcy and insolvency; computer forensic analysis; family law; valuations; fraud prevention, detection, and response; financial statement misrepresentation; and economic damages calculations. Visit the CFF website for more information.