Financial technology (fintech) has progressed rapidly over the past few decades, inadvertently arming modern financial criminals with more sophisticated tools to launder money or conduct other illicit activities. This trend has sparked a need for talented forensic accountants, especially in the public sector. As a result, the U.S. Bureau of Labor Statistics (BLS) estimates that the job market for these types of roles will grow by 6% from 2022-2032 — faster than the average of all occupations.
However, as technology evolves, so will the requirements to become a forensic accountant. To set themselves up for success, emerging graduates looking to enter this field should consider the benefits of an advanced degree, such as a Master of Public Administration (MPA). Top programs like Murray State University’s online MPA with a concentration in Forensic Accounting provide students with the technical skills, experience and leadership capabilities to catch financial criminals in the modern age.
What Is Money Laundering?
Money laundering is the process of making money from illegal activities appear legal, usually by adding “dirty” cash to revenue generated from a legitimate source of income. For example, a drug dealer would draw unwanted attention to themselves by depositing tens of thousands of dollars in cash into a bank account each week. Instead, they could reduce suspicion by buying a legitimate business and sprinkling their “dirty” money into the revenue from the business.
Any criminal who has generated money illegally would be interested in laundering it. This includes ill-gotten gains from illegal activities like drug trafficking, smuggling, insider trading, fraud, embezzlement and more. However, the money-laundering process stays more or less the same regardless of the crime:
- Placement: The launderer introduces their unlawful profits into the financial system for the first time, typically by getting a large sum of cash from one place to another.
- Layering: The launderer creates a complex pattern of financial transactions to hide the money’s origin. This step typically involves disguising the transactions as payments for products or services to appear legal.
- Integration: The launderer re-introduces the money back into the economy in a seemingly legal way so that the criminal can spend the money freely without raising suspicion.
Money laundering is fairly common in today’s world, with up to $2 trillion laundered internationally each year, per Zippia. This is where talented financial professionals come in. Many accountants choose to monitor and expose financial crimes like money laundering by examining financial records, a process known as forensic accounting.
Uncovering Fraudulent Activities by Analyzing Financial Records
Forensic accounting is the process of discovering and flagging potential financial crimes by using investigative accounting skills. While forensic accounting is commonly associated with high-level crime like drug trafficking, it also has plenty of common use cases in the U.S., including:
- Fraud investigations: examining financial records to discover fraudulent activities like embezzlement or asset misappropriation
- Audit and business reviews: performing internal and external audits to ensure financial records are accurate and compliant with relevant laws and regulations
- Insurance claims: assessing the validity of claims to ensure that settlements are fair and justified
- Asset tracing and recovery: tracing assets that may have been deliberately hidden during bankruptcy proceedings or insolvency
Forensic accounting has played a major role in bringing down some of corporate America’s biggest fraudsters. Famous examples of corporate fraud uncovered by forensic accountants include the Enron Corporation, Bernie Madoff’s Ponzi scheme and the German fintech company Wirecard AG. Without forensic accountants, these frauds would likely have continued to hurt people for years longer than they did.
Fight Fraud With a Forensic Accounting Degree Online
Stopping money laundering is a cat-and-mouse game. As criminals get more savvy at evading capture, forensic accountants must constantly update their strategies to catch criminals.
Since spotting financial crime is so complex, many young professionals choose to obtain an MPA before entering the workforce. Murray State University’s online MPA – Forensic Accounting program offers highly relevant coursework, such as the Forensic Accounting and Fraud Examination course and the Fraud Analytics course.
The Forensic Accounting and Fraud Examination course offers an introduction to forensic accounting, with an emphasis on fraud examination, detection and deterrence. Fraud Analytics trains students on the latest auditing tools and software programs used to identify potential financial crimes. Graduates of Murray State University’s program enter the workforce with the skillset necessary to succeed in a career as a forensic accountant. Students can complete this program in as few as 12 months.
Learn more about Murray State University’s online Master of Public Administration (MPA) with a concentration in Forensic Accounting program.
