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Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
An Empirical Investigation of the Relevant Skills of
Forensic Accountants
James A. Digabriele
To cite this article: James A. Digabriele (2008) An Empirical Investigation of the Relevant Skills of Forensic Accountants, Journal of Education for Business, 83:6, 331-338, DOI: 10.3200/ JOEB.83.6.331-338
To link to this article: http://dx.doi.org/10.3200/JOEB.83.6.331-338
Published online: 07 Aug 2010.
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rom business, government, regu-latory authorities, andthe courts, evidenceindicatesthatahigherlevelof expertiseisnecessarytoanalyzecurrent complicated financial transactions and events (Rezaee, Crumbley, & Elmore, 2006). As a result, forensic account-ing has been thrown into the forefront of the crusade against financial decep-tion (Ramaswamy, 2005; Rezaee et al., 2006). Bolgna and Linquist (1995) defined forensic accounting as the application of financial skills and an investigative mentality to unresolved issues,conductedwithinthecontextof therulesofevidence.
Research continuously confirms that preventingfraudanduncoveringdecep-tive accounting practices are in strong demandascompaniesrespondtocloser scrutiny of their financial activities by shareholders and government agencies (Kahan, 2006). The Federal Bureau of Investigation recently estimated that white-collarcrimecoststheUnitedStates morethan$300billionannually(KPMG Forensic, 2003).Many of these crimes aredifficulttoidentifybecausetheper-petrators have concealed their activities throughaseriesofcomplextransactions. Usuallylargevolumesoffinancialinfor-mation are involved, and the complex-ity of these investigations can strain a company’s resources (Brooks, Riley, & Thomas, 2005; Kahan). In addition, according to an American Institute of
Certified Public Accountants (AICPA; 2004)article,theuseofforensicaccount- ingprocedurestodetectfinancialreport- ingfraudshouldbeincreased.Thearti-clearguedthatforensicaccountantsand financial statement auditors have differ-entmindsets.Hence,auditteamsneedto be trained to incorporate more forensic accounting procedures into their audit practicesandtoretainmoreforensicspe-cialiststohelpdetectproblems(AICPA; InstituteofManagement&Administra-tion,2004).
Forensic accountants currently apply theiruniqueexpertisetoanarrayofdiverse assignmentsandareoftenhiredtodeter-mine whether there has been any inten-tional misrepresentation associated with a company’s financial records. Fraudu-lent misrepresentation can range from overvaluation of inventory and improper capitalizationofexpensestomisstatement ofearningsandembezzlement(Harris& Brown,2000;Messmer,2004).
Organizations also hire forensic accountants for guidance when evalu-ating potential business transactions. Forensic accountants assess a com-pany’s true worth during a merger or acquisitionandensurethatapurchaser isknowledgeableaboutthetargetfirm’s financial situation and value, while lookingforsignsofsuspiciousaccount-ing activity (Harris & Brown, 2000). Forensic accountants often provide accountingexpertiseduringexistingor
AnEmpiricalInvestigationoftheRelevant
SkillsofForensicAccountants
JAMESA.DIGABRIELE
MONTCLAIRSTATEUNIVERSITY MONTCLAIR,NEWJERSEY
F
ABSTRACT. Theauthorinvestigatedwhetherviewsoftherelevantskillsof forensicaccountantsdifferamongforensic accountingpractitioners,accountingaca-demics,andusersofforensicaccounting services.Universitiesandcollegesarecur- rentlyconsideringaddingforensicaccount-ingcoursestotheircurriculum.Theresults ofthepresentstudyprovidemuch-needed guidancetoeducators forthedevelop-mentofforensicaccountingcurriculumby identifyingpertinentskillstoaccompanya programofstudy.
Keywords:financialdeception,forensic accountant,relevantskills
Copyright©2008HeldrefPublications
pendinglitigation.Thisworkisprimar-ily focused on (a) quantifying dam-agesincasesofpersonalinjury,product liability,contractdisputes,andintellec-tualpropertyand(b)uncoveringhidden assets in complicated matrimonial law cases.Thesetypesofservicesmaycul- minateintheforensicaccountant’spro- vidingexpertwitnesstestimony(Durts-chi, 2003; Messmer, 2004; Peterson & Reider,2001;Ramaswamy,2005).
Forensic accountants also play an important role in government. They work for agencies such as the Fed-eralBureauofInvestigation,theCentral Intelligence Agency, and the Internal Revenue Service. Forensic accountants in this role look for signs of suspi-cious financial activity and fraud by individualsandbusinesses.Inaddition, forensic accountants have assumed a morevisibleroleinhelpingthegovern-ment evaluate accounting and banking records of suspected terrorists (Brooks etal.,2005).
Inthisstudy,Iusedasurveytoinvesti-gatewhetherdifferencesexistinviewsof therelevantskillsofforensicaccountants among forensic accounting practitioners, accountingacademics,andusersofforen-sic accounting services. Many universi-tiesandcollegesarecurrentlyconsidering addingforensicaccountingcoursestotheir curriculumoralreadyhave;thisevolution has unearthed an absence regarding the significant skill-set outcome that should accompany forensic accounting educa-tion. The results of the present research provide much-needed guidance that will furtherassisteducatorswiththedevelop-ment of forensic accounting curriculum by empirically identifying the views of what the important skills of a forensic accountantareamongthreemajorstake-study: (a) the academic stream, which rangesfromforensicaccountingcourse coverage to course identification and recommendation, and (b) the practitio-ner stream, which suggests the skills that forensic accountants use in prac-tice.Accordingtothe2006Association
of Certified Fraud Examiners’Report to the Nation on Occupational Fraud and Abuse, fraud costs companies in theUnitedStates$652billionannually. a fraud or forensic accounting course. Rezaee and Burtin (1997) concluded that the demand for forensic account-ing services will continue to increase. In addition, Rezaee and Burtin found that the academics and certified fraud examiners differed in opinion of how forensic accounting courses should be offered. Academics preferred to inte-grate forensic accounting topics in the existing accounting courses, whereas the certified fraud examiners preferred offeringaseparatecourse.Buckhoffand Schrader (2000) examined the extent to which academic institutions across the United States are offering forensic accounting courses. They found that, on average, universities considered it moderately important to add forensic accounting to their curriculum. Peter-sonandReider(2001)reviewedcourse syllabi of universities offering forensic accounting courses and examined the levelofthecourse,learningobjectives, and course requirements. Their find-ingsindicatedthataccountingeducators agreethatthereisaneedforuniversities to provide forensic accounting educa-tion.Rezaee(2002)examinedasample ofundergraduateandgraduateaccount-ing students, and the results indicated that the students believed that forensic accountingisaviablecareeroptionbut isnotgettingtheproperattentionincol-legesanduniversities.
The National Institute of Justice (2005) prepared a model curriculum guide for education and training in fraud and forensic accounting to aid academic institutions, public and pri-vate organizations, practitioners, fac-ulty, and prospective students. Rezaee etal.(2006)surveyedopinionsofprac-titioners and academics regarding the importance, relevance, and delivery of forensic accounting education. Their resultsindicatedthatthedemandforand
interestinforensicaccountingwillcon-tinuetoincrease.Bothpractitionersand academicsviewedaccountingeducation asrelevantandbeneficialtoaccounting students. However, the groups differed in opinions regarding topical coverage offorensicaccounting.
HarrisandBrown(2000)haveiden-tified specialized skills and technical abilitiesofforensicaccountants.Foren-sicaccountantsareusuallyfamiliarwith criminal and civil law and understand courtroom procedures and expecta-tions. Those researchers also stressed investigative skills, including theories, methods, and patterns of fraud abuse. Forensicaccountantsthinkcreativelyto considerandunderstandthetacticsthat a fraud perpetrator may use to commit and conceal fraudulent acts. Addition-ally,theyneedtoclearlyandconcisely communicate findings to various par-ties, including those with less knowl-edgeofaccountingandauditing.Grippo andIbex(2003)illustratedthatthemost importantskillsofforensicaccountants comefromexperienceinaccountingand auditing, taxation, business operations, management,internalcontrols,interper-sonalrelationships,andcommunication. Messmer (2004) stated that successful forensicaccountantsmusthaveanalyti-cal abilities, strong written and verbal communication skills, a creative mind-set,andbusinessacumen.Theymustbe abletointerviewandelicitinformation from potentially uncooperative people andpossessastrongamountofskepti-cism.Ramaswamy(2005)believedthat forensic accountants are distinctively positionedtobeabletouncoverfinan-cial deceptions, their prominent skills being an in-depth knowledge of finan-cial statements, the ability to critically analyze them, and a thorough under-standingoffraudschemes.Ramaswamy also believed that forensic accountants should have the ability to comprehend theinternalcontrolsystemsofcorpora-tions and be able to assess their risks. Last, knowledge of psychology helps forensic accountants to understand the impulsesbehindcriminalbehaviorthat motivateandencouragefinancialdecep- tion.Also,(a)interpersonalandcommu-nicationskillsthataidindisseminating informationaboutthecompany’sethics and (b) an understanding of criminal
and civil law and of the legal system andcourtproceduresareskillsthataid forensicaccountants.
The academic literature identifies forensic accounting courses and con-tent, whereas the practitioner literature suggests skills necessary in practice. However, the literatures have not yet empiricallyidentifiedtheviewsofthree major stakeholders—accounting aca-demics, forensic accounting practitio-ners, and users of forensic accounting services—regarding which skills are importantforforensicaccountants.
The three aforementioned stake-holders will be significant in shap-ing the future of forensic accounting. Accounting academics will educate futurestudentswhowillbecomeforen-sic accountants; the practitioners must be competent in their practice; and the users (attorneys) have the potential to structure changes in forensic account-ingasthemarketfortheseservicesare dictatedthroughcaselaw.
The present study adds the neces-sary incremental contribution to the literature that identifies relevant skills of forensic accountants and whether any differences exist in the views of thoseskillsamongthethreesignificant stakeholders. In light of the growing importance of forensic accounting in the business environment, this study provides useful information for faculty members and universities working to implement forensic accounting educa-tionintheircurriculum.Asthisthriving area of accounting continues to evolve it will be necessary to ensure that the correct skill set results from forensic accountingeducation.
METHOD
I conducted a nationwide survey on a random sample of 1,500 accounting academics, forensic accounting practi-tioners, and users of forensic account-ing services. For this study, I classified attorneysastheprimaryusersofforen-sic accounting services. The sample wascompiledasfollows:Iretrieved(a) 500 random e-mail addresses of fac-ulty members from accounting depart-ments of various universities across the nation;(b)500randome-mailaddresses offorensicaccountingpractitionersfrom
several membership databases—the NationalAssociationofCertifiedValua-tionAnalyst(NACVA),AmericanBoard of ForensicAccounting (ABFA),Asso-ciation of Certified Fraud Examiners (ACFE), and the American Institute of Certified Public Accountants (AICPA) businessvaluationandforensicandliti-gation services section (BVFLS)—and (c) 500 random e-mail addresses from a Google search of attorneys practicing commercial litigation, matrimonial law, and damages. These types of attorneys oftenuseforensicaccountantsforarange of damage, valuation, and fraud cases. Thelikelihoodthatanattorneywhoprac-ticescommerciallitigation,matrimonial law,anddamagesdoesnotuseaforensic accountant is slim because these types of attorneys are the focus of marketing efforts for accounting firms providing forensicaccountingservices.
I prepared, pretested, and e-mailed the survey instrument (see the Appen-dix). Participants were e-mailed using http://www.surveymonkey.comandwere asked the extent to which they agreed withstatementsaddressingeachofnine competenciesthatweredeemedbyprior literature to be important skills of a forensic accountant.The agreement rat-ingsweremadeona5-pointLikertscale ranging from 0 (strongly disagree) to 4 (stronglyagree).
Initially,Icomputeddescriptivestatis-tics for group membership (frequencies andpercentages)aswellastheresponses relatedtotheninecompetencies(bothper-centages within each category and over-all means and standard deviations). The correlations among the nine items were also computed. A principal component analysis was then performed to exam-ine the underlying structure of the nexam-ine items. The eigenvalues-greater-than-one rule was used to determine the number ofcomponentstoextractandrotate.The eigenvalues-greater-than-one rule states thatthenumberoffactorstobeextracted shouldbeequaltothenumberoffactors having an eigenvalue (variance) greater than 1. The rationale for choosing this particularvalueisthatafactormusthave varianceatleastaslargeasthatofasingle standardizedoriginalvariable.Descriptive statistics(ranges,means,standarddevia-tions, and internal consistency reliability coefficients)werethencomputedforthe
compositescoresresultingfromtheprin-cipalcomponentanalysis.
I used two-tailed tests and a Cron-bach’sα level of .05 for all inferential analyses.Themainsetofanalysescon-sistedofaseriesofone-wayanalysesof variances(ANOVAs)comparingpracti-tioners, academics, and users in terms oftheirratingsoftheimportanceofthe ninecompetencies.WhentheANOVAs were statistically significant, follow-up tests were performed by usingTukey’s HSD. An alternative set of analyses was performed by using nonparamet-ricKruskal-Wallisteststocomparethe importanceratingsofthethreegroups. InadditiontotheANOVAsandKruskal- Wallistestsperformedontheindividual items, similar procedures were used to compare the three groups on the com-positescores.
RESULTS
ItemDescriptiveStatistics
Atotalof252individualscompleted thesurvey.Ofthese,102(40.5%)were practitioners, 72 (28.6%) were users, and 78 (31.0%) were academicians. The overall response rate was 16.80%. Descriptive statistics for the nine areas of competency are shown in Table 1, including the percentage in each responsecategoryandtheoverallmeans andstandarddeviations.Theitemsrated asmostimportantwerecriticalthinking (M=3.63,SD=0.67),deductiveanaly-sis(M=3.60,SD=0.66),andwritten communication(M=3.55,SD=0.61). Theitemsratedasleastimportantwere specificlegalknowledge(M=2.96,SD = 0.86), composure (M= 3.29,SD= 0.67),andunstructuredproblemsolving (M=3.34,SD=0.89).
The correlations among the impor-tanceratingsfortheninecompetencies areshowninTable2.Thehighestcor-relations were between oral communi-cation and written communicommuni-cation (r = .73) and between deductive analysis andcriticalthinking(r=.69),whereas the lowest were between unstructured problem solving and oral communica-tion(r=.24)andbetweenunstructured problemsolvingandwrittencommuni-cation (r= .30). All correlations were statisticallysignificant(p<.0005).
PrincipalComponentAnalysis
I performed a principal component analysis on the nine competency items to determine whether there were any relevant groupings of items and, if so, what these groupings were. Two com-ponentshadeigenvaluesgreaterthan1 (4.71and1.11),andthereforeIrotated two components using varimax. The rotated component loadings are shown in Table 3. The first rotated compo-nent had a sum of squared loadings of 3.26,explaining36.20%ofthevariance amongthenineitems.Sixoftheitems had loadings of .63 or greater on this component (deductive analysis, critical thinking,unstructuredproblemsolving, investigative flexibility, analytical
pro-ficiency,andspecificlegalknowledge). Therefore, this component was labeled knowledge and ability. The second componenthadasumofsquaredload-ingsof2.57,accountingfor28.53%of the variance.Three items had loadings of.73orgreateronthiscomponent(oral communication, written communica-tion, and composure). This component waslabeledperformance.Together,the twocomponentsaccountedfor64.73% ofthevarianceamongthenineitems.
Twocompositescoreswerecomput-ed to operationalize these components by summing the scores on the items from each component.The correlation betweenthesetwoscoreswas.61(p< .0005).Descriptivestatisticsforthetwo compositescoresareshowninTable4.
Knowledge and ability composite scores ranged from 6–24 with a mean of 20.51 (SD = 3.36). Scores on the performance composite ranged from 2–3withameanof10.31(SD=1.69). Internal consistency reliability coeffi-cients (Cronbach’sα) were computed for the two composites and were ade-quate (.85 for knowledge and ability and.83forperformance).
InferentialAnalyses
GroupDifferencesonCompetency Items
I performed 9 one-wayANOVAs to determineifthethreegroups(practitio-ners, users, and academicians) differed in their ratings of the importance of TABLE1.Means,StandardDeviations,andPercentageofRespondents(N=252)ChoosingEachCompetencyItem
Strongly Strongly
Item M SD disagree(0) Disagree(1) Neutral(2) Agree(3) agree(4)
1.Deductive
analysis 3.60 0.66 0.8 1.2 1.6 29.8 66.7
2.Critical
thinking 3.63 0.67 0.4 2.0 2.4 25.0 70.2
3.Unstructured
problemsolving 3.34 0.89 0.4 4.8 11.5 27.4 56.0
4.Investigative
flexibility 3.48 0.67 0.0 1.2 6.3 36.1 56.3
5.Analytical
proficiency 3.53 0.66 0.4 0.8 4.8 33.3 60.7
6.Oral
communication 3.46 0.67 0.0 1.6 5.2 38.5 54.8
7.Written
communication 3.55 0.61 0.0 0.8 3.6 35.3 60.3
8.Specificlegal
knowledge 2.93 0.86 0.0 8.3 15.1 51.6 25.0
9.Composure 3.29 0.67 0.0 1.2 8.7 49.6 40.5
TABLE2.CorrelationsAmongCompetencyItems
Item 1 2 3 4 5 6 7 8 9
1.Deductiveanalysis —
2.Criticalthinking .69 —
3.Unstructuredproblemsolving .45 .43 —
4.Investigativeflexibility .58 .50 .50 —
5.Analyticalproficiency .53 .47 .38 .54 —
6.Oralcommunication .35 .39 .24 .43 .43 —
7.Writtencommunication .42 .48 .30 .46 .44 .73 —
8.Specificlegalknowledge .43 .50 .55 .45 .46 .43 .45 —
9.Composure .43 .47 .31 .46 .36 .61 .54 .48 —
Note.Allcorrelationswerestatisticallysignificantatp<.0005.N=252.
the nine competencies. Tukey’s HSD follow-up tests were used when the ANOVA was statistically significant. Table 5 presents the mean scores on eachcompetencyitemasafunctionof group membership. The first ANOVA, performedondeductiveanalysisimpor-tance ratings, was statistically signifi-cant,F(2, 249) = 5.64,p= .004. Fol-low-up HSD tests indicated that users (M= 3.40,SD= 0.90) rated deductive analysisaslessimportantthandidaca-demicians (M= 3.76,SD= 0.43),p= .003, but that neither of these groups differed from practitioners (M= 3.63, SD=0.58).
The second ANOVA compared the threegroupsoncritical-thinkingimpor-tance ratings and was statistically sig- nificant,F(2,249)=7.53,p=.001.Fol-low-up HSD tests indicated that users (M= 3.39,SD= 0.85) rated critical thinking as less important than practi-tioners(M=3.67,SD=0.55),p=.017, and less important than academicians (M=3.79,SD=0.57),p=.001.Practi-tionersandacademiciansdidnotdiffer in their ratings of the importance of criticalthinking.
The thirdANOVA compared the rat-ings of the importance of unstructured problemsolvingamongthethreegroups. The result was statistically significant, F(2, 249) = 26.14,p< .0005, indicat-ing that the groups differed. Follow-up HSDtestsindicatedthatusers(M=2.78, SD= 0.98) felt that unstructured prob-lemsolvingwaslessimportantthandid of the importance of investigative flex-ibility and was statistically significant, F(2,249)=11.67,p<.0005.HSDtests indicated that users (M= 3.17,SD= 0.79)ratedinvestigativeflexibilityasless importantthaneitherpractitioners(M= 3.61,SD=0.57),p<.0005,oracademi-cians(M=3.59,SD=0.59),p<.0005. The importance ratings of practitioners andacademiciansdidnotdiffer.
ThefifthANOVAcomparedtheana-lytical proficiency importance ratings and was statistically significant,F(2, 249)=5.41,p=.005.Follow-upHSD testsindicatedthatusers(M=3.33,SD = 0.71) rated analytical proficiency as lessimportantthanacademicians(M= 3.68,SD=0.50),p=.004.Practitioners’ ratings of the importance of analytical proficiency (M= 3.56,SD= 0.71) did notdifferfromeitherusers’oracademi-cians’ratings.
ThesixthANOVAwasperformedto compare the ratings of the importance of oral communication. The ANOVA was not statistically significant,F(2, 249) = 2.52,p= .083, indicating that the three groups’ ratings of the impor-tance of oral communication did not differ. The seventh ANOVA compared theratingsoftheimportanceofwritten communication and was also not sta-tistically significant,F(2, 249) = 1.19, p=.305.
The eighth ANOVA compared the importance ratings of specific legal knowledgeamongthethreegroups.The
result was statistically significant,F(2, 249)=13.74,p<.0005,indicatingthat thereweredifferencesamongthethree groups. HSD tests indicated that the importanceratingsofusers(M=2.51, SD= 1.02) were lower than those of practitioners(M=3.05,SD=0.75),p< .0005,andlowerthanthoseofacademi-cians(M=3.17,SD=0.67),p<.0005, and that the ratings from practitioners andacademiciansdidnotdiffer.
IperformedthefinalANOVAtocom-pare the ratings of the importance of composureamongthethreegroups.This ANOVAwasnotstatisticallysignificant, F(2,249)=0.90,p=.408.Thisindicates that users, practitioners, and academi-ciansdidnotdifferwithrespecttotheir ratingsoftheimportanceofcomposure.
I performed a supplementary set of analyses by using nonparametric tech-niques to compare the importance rat-ingsofthethreegroups.Kruskal-Wallis tests were used to compare the ratings of the nine competencies. The pattern ofresults(i.e.,statisticalsignificanceat anαlevelof.05ornot)wasidenticalto thatoftheANOVAsandthereforeIdo notdiscusstheseanalysesindetail.
GroupDifferencesonCompetency Composites
In addition to examining differences among the three groups on the specif-ic competency items, I performed two ANOVAstocomparethethreegroupson thecompositesscoresfor(a)knowledge andabilityand(b)performance.Table6 showsthemeanscoresonthetwocom-positesasafunctionofgroup.Thefirst ANOVA was performed by comparing theknowledgeandabilityscoresforthe threegroups,andtheresultwasstatisti-callysignificant,F(2,249)=20.92,p< .0005. Follow-up HSD tests indicated that users (M= 18.58,SD= 4.22) had lower scores than either practitioners (M= 20.96,SD= 2.79),p< .0005,or academicians (M= 21.69,SD= 2.24), p< .0005, but that practitioners and academiciansdidnotdiffer.
The second ANOVA compared the scores on the performance scale for the three groups. The results of this test were not statistically significant, F(2,249)=1.55,p =.214.Thisfind-ingindicatesthatthethreegroupsdid TABLE3.RotatedPrincipalComponentLoadingsofCompetencyItems
Itemorstatistic Knowledgeandability Performance
1.Deductiveanalysis .77 .25
2.Criticalthinking .72 .33
3.Unstructuredproblemsolving .79 .03
4.Investigativeflexibility .71 .33
5.Analyticalproficiency .63 .35
6.Oralcommunication .18 .90
7.Writtencommunication .28 .83
8.Specificlegalknowledge .64 .36
9.Composure .33 .73
Sumofsquaredloadings 3.26 2.57
Percentageofvarianceexplained 36.20 28.53
Note.N=252.
notdifferintheirscoresontheperfor-mancecomposite.
DISCUSSION
Iaskedpractitioners,academics,and users of forensic accounting services 10 questions that pertained to their viewsaboutwhatskillsareinherently importantforbeingaforensicaccoun-tant. In consideration of the barrage of recent financial reporting scan-dals,deductiveanalysisappearstobe necessary and essential for forensic accountants to meet the objective of uncoveringapotentialfinancialfraud. Forensic accounting courses taking
aim at financial misrepresentations should incorporate course objectives tomeetthisability.
An expert witness must be able to discern fact from fiction to maintain credible testimony. Courses developed inthisareashouldemphasizetheability to remove any noncorroborated opin-ionsfromexpertreportsandtestimony. Thisskillwasratedasoneofthemore importantones(seeTable1).
Educators have based accounting educationoncompliancewithrulesand procedures.Forensicaccountingisdif-ferentbecauseproblemsolvingbecomes moreofanimprovisedapproachrather than a structured plan. This skill type
is in direct opposition to traditional accountingskills.
The results of the present study indicate that practitioners and aca-demics agree on the importance of forensic accountants’ moving away fromanarrowapproachandapplying a more holistic technique (see Table 5). These findings further illustrate theneedforamoreopen-mindedskill set in accounting. Considering the postfinancial-fraud regulatory envi-ronment, researchers can infer that the ability to solve a financial puzzle with an incomplete set of pieces is an extremely important characteristic forforensicaccountants.Practitioners TABLE4.DescriptiveStatisticsforCompetencyCompositeScores
Composite Min. Max. M SD α
Knowledgeandability 6 24 20.51 3.36 .85
Performance 3 12 10.31 1.69 .83
Note.N=252.
TABLE5.MeansandStandardDeviationsofCompetencyItems,asaFunctionofGroup
Practitioners Users Academicians
Factor M SD M SD M SD
1.Deductiveanalysis 3.63 0.58 3.40 0.90 3.76 0.43
2.Criticalthinking 3.67 0.55 3.39 0.85 3.79 0.57
3.Unstructuredproblemsolving 3.45 0.86 2.78 0.98 3.71 0.51
4.Investigativeflexibility 3.61 0.57 3.17 0.79 3.59 0.59
5.Analyticalproficiency 3.56 0.71 3.33 0.71 3.68 0.50
6.Oralcommunication 3.58 0.60 3.39 0.76 3.38 0.65
7.Writtencommunication 3.59 0.57 3.46 0.73 3.59 0.52
8.Specificlegalknowledge 3.05 0.75 2.51 1.02 3.17 0.67
9.Composure 3.36 0.66 3.25 0.75 3.24 0.63
Note.N=252.Groupns:practitioners=102,users=72,academicians=78.
TABLE6.MeansandStandardDeviationsofCompetencyComposites,asaFunctionofGroup
Practitioners Users Academicians
Item M SD M SD M SD
Knowledgeandability 20.96 2.79 18.58 4.22 21.69 2.24
Performance 10.53 1.51 10.10 2.05 10.22 1.53
Note.N=252.Groupns:practitioners=102,users=72,academicians=78.
and academics agree on the impor-tanceofthisskill(seeTable5).
Almost 55% of all respondents strongly agreed that oral communica-tion is an important skill for forensic accountants (seeTable 1).This skill is particularlyimportantinexperttestimo-nywhenaforensicaccountantexplains findingstoajudgeandjury.Eachgroup agreed on the importance of forensic accountants’ possessing the ability to effectivelycommunicateinwriting,and 60%ofallrespondentsagreedstrongly (seeTable1).Expertreportsareroutine-ly scrutinized, and the need to convey findingsproperlyisparamount.
Academics and practitioners agreed thatforensicaccountantsshouldhavea workingknowledgeofthelegalprocess andtherulesofevidence(seeTable5). One of the interesting results of this study is the fact that users of foren-sic accounting services did not view this as an important skill. Because the users were attorneys, they may have readtoofarintothequestion,possibly thinking that forensic accountants may practice law without proper licensing. However,themainpointofthequestion wastoemphasizetheneedforforensic accountants to understand certain legal issues.Almost50%oftherespondents agreed that maintaining composure is an important skill for forensic accoun-tants. The most highly rated area of need for this skill was that of expert testimony in either a deposition or a court.Thecomposureofanexpertcan beanintegralcomponentintheultimate caseoutcome.
This study also illustrates two dis-tinctareasofcompetencybasedonthe items with high loadings in the prin-cipal component analysis (see Table 3): (a) knowledge and ability and (b) performance. The knowledge and abil-ity component relates to whether an individual has the background knowl-edge and thinking skills to be effec-tive, whereas the performance compo-nentrelatestotheindividual’sabilityto turnthisknowledgeandabilityintoan effective presentation. The groups dif-fered on all six knowledge and ability items but on none of the performance items.Theyalsodifferedontheknowl-edge and ability composite but not on the performance composite (see Table
6). The general trend was for users to rateknowledgeandabilityitemsasless importantthantheyratedtheothertwo groups.Themostlogicalreasonforthis is that attorneys are the end users of forensic accounting services and are more concerned with the effective-nessofaforensicaccountantthanwith the prerequisite components. Forensic accountingeducatorsmayconsiderseg-regatingcoursecontentonthebasisof thesetwodistinctareas.
The identification of relevant skills offorensicaccountantsillustratedinthe results of this study contributes to the literatureinforensicaccountingeduca-sic accounting. This research surveyed practitioners, academics, and users of forensicaccountingservicesthroughout theUnitedStatestodeterminewhether there are differences in views of the relevantskillssuggestedinthepractitio-ner literature. The results indicate that practitioners and academics agree that critical thinking, unstructured problem solving,investigativeflexibility,analyti-calproficiency,andlegalknowledgeare importantskillsofforensicaccountants. Users of forensic accounting services rated deductive analysis as less impor-tantthandidacademics;however,both groups agreed with practitioners, who viewed deductive analysis as impor-tant(asillustratedinthesecondhighest meanvaluesamongallskillssurveyed). Thegroupsdidnotdifferonoralcom-munication, written comThegroupsdidnotdifferonoralcom-munication, or composure rankings. These results show that some skills are relevant and important to the outcome of forensic accounting education. Educators can use these skills as a guide to direct academic curriculum with the proper outcomeobjective.
The limitations of the present study maybeabiasinunderstandingtherel-evance of a particular skill of forensic accountants. In addition, as an attri-butethatisinherenttosurveyresearch,
nonresponse bias was another poten-tial limitation. The only way to evalu-ate this limitation was to compare levalu-ate responsestoearlierones.Therewereno significantdifferences.
Futureresearchersinthisareacould progresstoclassifyingskillsforidenti-fiedcourses.Forexample,acourseon forensic legal knowledge might more appropriatelyhaveanobjectiveofwrit-tenandoralcommunicationthanoneof analyticalproficiency.
NOTES
Dr. James A. DiGabriele teaches forensic accounting and fraud examination at Montclair StateUniversity.
Correspondence concerning this article should be addressedto Dr. JamesA. DiGabriele,Mont-clairStateUniversity,AccountingLawTaxation, 1NormalAvenue,Montclair,NJ07052,USA.
E-mail:jim@dmcpa.com
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APPENDIX SurveyInstrument
1.Animportantskillrequirementofaforensicaccountantisdeductiveanalysis—theabilitytotakeaimatfinancialcontradictionsthat donotfitinthenormalpatternofanassignment.
2.Animportantskillrequirementofaforensicaccountantiscriticalthinking—theabilitytodecipherbetweenopinionandfact. 3.Animportantskillrequirementofaforensicaccountantisunstructuredproblemsolving—theabilitytoapproacheachsituation (inherentlyunique)preparedtosolveproblemswithanunstructuredapproach.
4.Animportantskillrequirementofaforensicaccountantisinvestigativeflexibility—theabilitytomoveawayfromstandardizedaudit proceduresandthoroughlyexaminesituationsforatypicalwarningsigns.
5.Animportantskillrequirementofaforensicaccountantisanalyticalproficiency—theabilitytoexamineforwhatshouldbeprovided ratherthanwhatisprovided.
6.Animportantskillrequirementofaforensicaccountantisoralcommunication—theabilitytoeffectivelycommunicateinspeechvia experttestimonyandgeneralexplanationthebasesofopinion.
7.Animportantskillrequirementofaforensicaccountantiswrittencommunication—theabilitytoeffectivelycommunicateinwriting viareports,charts,graphs,andschedulesthebasesofopinion.
8.Animportantskillrequirementofaforensicaccountantisspecificlegalknowledge—theabilitytounderstandbasiclegalprocesses andlegalissuesincludingtherulesofevidence.
9.Animportantskillrequirementofaforensicaccountantiscomposure—theabilitytomaintainacalmattitudeinpressuredsituations. 10.Pleaseidentifyyourrolewithregardtoforensicaccounting.SelectonlyONEchoice.
Practitioner Userofforensicaccountingservices Academic
Note.Questions1–9wereansweredona5-pointLikert-typescalerangingfrom0(stronglyagree)to4(stronglydisagree).
