Traditional accountants and auditors have long been referred to as "bean counters." Some may take offense at the phrase, but if they're being honest, they admit that it is a simplistic but accurate representation of the work they do.
Your average, everyday accountants and auditors are generally engaged to count the beans. They take a look at the numbers, make sure they all add up, and possibly issue a report saying how and why the numbers add up.
There are different kinds of beans, just like the various industries that accountants may come across. Counting different types of beans may require different techniques and rules.
Would a "regular" accountant know how to find the beans? Could she or he sort the beans in a way that makes sense to non-accountants? The average accountant has never had to find or sort beans before, so who knows if she or he can find the beans?
Forensic Accounting as Bean Finding
In contrast to traditional accounting and auditing, bean finding involves different skills. A good understanding of financial statements and the underlying data is still critical. In addition to this, forensic accountants need an ability to effectively apply investigative techniques.
"Investigative intuition" is a good way to describe a necessary element of the forensic accounting equation. While understanding investigative techniques is one thing, being able to apply them in the best way is different.
I don't think that the "gut" feeling of a good investigator is teachable. If one possesses that intuition, even in its rawest form, then that ability can be developed and honed. But if a person doesn't have the basic instinct, it will be hard to make her or him into a good forensic accountant.
The investigative intuition is used to find the beans, or in other words, to follow the money. Forensic accounting engagements are usually geared toward finding where money went, how it got there, and who was responsible.
Once the beans are found, they must be reassembled into a meaningful format. Sometimes all the beans aren't found. There may be holes in the data, and a good forensic accountant can fill in some of the gaps with good estimates or explain why those gaps aren't filled.
While "regular" accountants and auditors typically have a standard format for their work, often detailed in work programs, forensic accountants do not usually have such a structured method of conducting investigations. There are standard documents that are collected and possibly a typical starting point for an investigation. But from there the project can go in any direction.
I liken a forensic investigation to a family tree. The investigator starts going down one path, and there are several branches and directions in which to move. A path is selected for the investigation, and again there are many more paths branching off that one.
A good investigator is able to organize those divergent paths so that she or he can go back and investigate the remaining paths. An effective investigation, therefore, combines the instinct, technical knowledge, and organizational skills.
Areas of Specialty
Within the specialty of forensic accounting, there are sub-specialties. Some forensic accountants try to work in all of them, while others of us have selected a couple of areas on which to focus.