Forensic Accounting Education
Introduction
We have recently witnessed significant emphasis on improving investor confidence and public trust in financial reports. Reported financial scandals (e.g., Enron, WorldCom, Global Crossing, Qwest, Parmalat) have eroded investor confidence and made forensic accounting an attractive career opportunity for accountants to combat fraud. Forensic accounting is defined in this study array as the practice of rigorous data collection and analysis in the areas of litigation support consulting, expert witnessing, and fraud examination.
Review of Literature
KPMG's Fraud Survey (2003) reveals that more companies are: recently experiencing incidents of fraud than in prior years; taking measures to combat; and launcing new anti-fraud initiatives and programs in response to the Sarbanes-Oxley Act of 2002 (KPMG 2003). PricewaterhouseCoopers' (PWC) 2003 Global Crime Survey indicates that 37 percent of respondents in 50 countries reported significant economic crimes with the average loss per company of $2,199,930 (PWC 2003). Prior research (Rezaee 2002; Crumbley 2001; Peterson and Reider 1999, 2001; Rezaee et al., 1996; Rezaee and Burton 1997) reviews the literature on forensic accounting practices, certifications, and education. Buckhoff and Schrader's study (2000, 135) finds, "adding a forensic accounting course to the accounting curriculum can greatly benefit the three major stakeholders in accounting education: academic institutions, students, and employers of accounting graduates." Groomer and Heintz (1994) analyze the topics covered in internal auditing courses in the United States and Canada and find that fraud related topics were taught in more than 31 percent of examined internal auditing courses. Rezaee et al. (1996) examine the coverage of forensic accounting in the accounting curriculum and find that only a handful of universities offer a fraud and/or forensic course, and suggest that the accounting curriculum provide a knowledge acquisition base in forensic accounting as part of curriculum changes in response to the mandated American Institute of Certified Public Accountants (AICPA) 150-hour accounting Program. Peterson and Reider (2001) review forensic accounting course syllabi of universities and analyze the level of course of offering, learning objectives, content of forensic accounting courses, and course requirements. Three most important course objectives specified in the reviewed syllabi are (1) providing education on pervasiveness of and the cause of fraud and white-collar crime; (2) exploring methods of fraud education, investigation and pervention; and (3) obtaining insight on fraud prevention and identifying weaknesses in internal control systems.
Methods and Procedures
Two methods are used in gathering data pertaining to forensic accounting education. First, we perform a content analysis of a sample of 21 forensic accounting syllabi. Forensic accounting syllabi were either received from professors teaching a forensic accounting (fraud examination) course or obtained from accounting students' World Wide Web (Web) sites. Second, we conduct a nationwide survey of accounting academicians and practicing CPAs to determine the demand, benefits, coverage, and delivey of forensic accounting education. A random sample of 1,000 accounting professors, teaching primarily auditing and financial accounting, was selected from Hasselback's 2002 Accounting Faculty Directory.
Conclusion
The past two decades have witnessed significant change in the business environment including globalization, technological advances and now with reported high-profile financial scandals, ways to improve public trust and investor confidence in financial reports. Emerging regulatory, social, economical, ethical, and legal challenges facing corporate America that contribute to an increasing demand for forensic accounting should encourage accounting programs to place more focus on this area of accounting.
Results indicate that (1) the demand for and interest in forensic accounting is expected to continue to increase, (2) more universities are planning to provide forensic accounting education, (3) both groups of respondents viewed forensic accounting education relevant and beneficial to accounting students, the business community, the accounting profession, and accounting programs, (4) the majority of 49 suggested forensic acounting topics are considered as very important for integration into the accounting curriculum by both groups of surveyed academicians and practitioners, and (5) the relative importantce of these topics varies between the two groups, however, there is a general consensus as to the importantce of these topics in forensic accounting.
We have recently witnessed significant emphasis on improving investor confidence and public trust in financial reports. Reported financial scandals (e.g., Enron, WorldCom, Global Crossing, Qwest, Parmalat) have eroded investor confidence and made forensic accounting an attractive career opportunity for accountants to combat fraud. Forensic accounting is defined in this study array as the practice of rigorous data collection and analysis in the areas of litigation support consulting, expert witnessing, and fraud examination.
Review of Literature
KPMG's Fraud Survey (2003) reveals that more companies are: recently experiencing incidents of fraud than in prior years; taking measures to combat; and launcing new anti-fraud initiatives and programs in response to the Sarbanes-Oxley Act of 2002 (KPMG 2003). PricewaterhouseCoopers' (PWC) 2003 Global Crime Survey indicates that 37 percent of respondents in 50 countries reported significant economic crimes with the average loss per company of $2,199,930 (PWC 2003). Prior research (Rezaee 2002; Crumbley 2001; Peterson and Reider 1999, 2001; Rezaee et al., 1996; Rezaee and Burton 1997) reviews the literature on forensic accounting practices, certifications, and education. Buckhoff and Schrader's study (2000, 135) finds, "adding a forensic accounting course to the accounting curriculum can greatly benefit the three major stakeholders in accounting education: academic institutions, students, and employers of accounting graduates." Groomer and Heintz (1994) analyze the topics covered in internal auditing courses in the United States and Canada and find that fraud related topics were taught in more than 31 percent of examined internal auditing courses. Rezaee et al. (1996) examine the coverage of forensic accounting in the accounting curriculum and find that only a handful of universities offer a fraud and/or forensic course, and suggest that the accounting curriculum provide a knowledge acquisition base in forensic accounting as part of curriculum changes in response to the mandated American Institute of Certified Public Accountants (AICPA) 150-hour accounting Program. Peterson and Reider (2001) review forensic accounting course syllabi of universities and analyze the level of course of offering, learning objectives, content of forensic accounting courses, and course requirements. Three most important course objectives specified in the reviewed syllabi are (1) providing education on pervasiveness of and the cause of fraud and white-collar crime; (2) exploring methods of fraud education, investigation and pervention; and (3) obtaining insight on fraud prevention and identifying weaknesses in internal control systems.
Methods and Procedures
Two methods are used in gathering data pertaining to forensic accounting education. First, we perform a content analysis of a sample of 21 forensic accounting syllabi. Forensic accounting syllabi were either received from professors teaching a forensic accounting (fraud examination) course or obtained from accounting students' World Wide Web (Web) sites. Second, we conduct a nationwide survey of accounting academicians and practicing CPAs to determine the demand, benefits, coverage, and delivey of forensic accounting education. A random sample of 1,000 accounting professors, teaching primarily auditing and financial accounting, was selected from Hasselback's 2002 Accounting Faculty Directory.
Conclusion
The past two decades have witnessed significant change in the business environment including globalization, technological advances and now with reported high-profile financial scandals, ways to improve public trust and investor confidence in financial reports. Emerging regulatory, social, economical, ethical, and legal challenges facing corporate America that contribute to an increasing demand for forensic accounting should encourage accounting programs to place more focus on this area of accounting.
Results indicate that (1) the demand for and interest in forensic accounting is expected to continue to increase, (2) more universities are planning to provide forensic accounting education, (3) both groups of respondents viewed forensic accounting education relevant and beneficial to accounting students, the business community, the accounting profession, and accounting programs, (4) the majority of 49 suggested forensic acounting topics are considered as very important for integration into the accounting curriculum by both groups of surveyed academicians and practitioners, and (5) the relative importantce of these topics varies between the two groups, however, there is a general consensus as to the importantce of these topics in forensic accounting.
Source: Zabihollah Rezae, D. Larry Crumbley, Robert C. Elmore (2003).