Forensic accounting in Asia has only recently taken on the role of a mature service line and provided accountants with a formalised career path - a fact that has challenged accounting firms' recruitment plans for these specialist roles, particularly at mid-to-senior management ranks.
While the number of people interested in forensic work is rising, thanks in part to television series such as CSI, a leisure interest in what can be very challenging work simply isn't enough, according to Mark Bowra, a partner in the forensic division at KPMG Advisory (China).
"We need people with an enquiring mindset and a multitude of different skills, and they must be able to apply those skills in a logical manner," Bowra said. "Accounting expertise is useful but in our line of work we're looking for someone who is a little different, someone who can solve practical problems."
Forensic work is not driven by processes or schedules like some other accounting areas. Bowra described it as an analytical form that merges three disciplines: accounting, law and pure investigation. The technical definition is that it is accounting where people or facts may disagree.
"Forensics is about understanding the numbers, situations, facts, transactions, accounts, events and individuals' backgrounds and motivations," he said. "Our role is to understand what drives people to do things that may be both in the interests of the company and against the interests of the company."
Much of the work of a forensic accountant involves interviewing people within companies, so a diverse set of skills is required in order to make the most of the information and understand it.
KPMG began hiring graduates for its forensics division more than two years ago. It remains one of the smallest and most specialised divisions in the firm. Its 50-strong workforce is split between Hong Kong, Shanghai and Beijing. Shanghai, with more than 20 people in place, has just overtaken Hong Kong as KPMG's largest forensics team in Greater China.
Within the discipline, team members fulfil different functions. The mainstream function, forensic accounting, is primarily investigative, and people working in this stream tend to come from an accounting or law enforcement background and have strong accounting or business skills.
Forensic technology is a second function and requires people with technology skills who are able to work with an investigator seeking to discover information from computer hard drives. "These people come from a technology background but are not simply computer nerds," Bowra said. "They know where to look and what to look for."
The third stream of people is involved in background checks. They tend to come from areas such as journalism, private investigation or law enforcement. They are important in providing the intelligence that leads to an understanding of companies.
"People are moved by all sorts of motives," Bowra said. "On the mainland and in Hong Kong, where there is a lot of family business, companies often employ family members."
"In the course of doing our work, we need to understand the backgrounds of these people because that can drive the behaviour that we see while examining transactions in an investigation."
Until recently, forensic practitioners were brought into companies only when something had gone wrong and in order to identify the extent of the problem and its perpetrators. But now they are beginning to be brought in before a problem occurs. This change towards a more preventive environment is largely the result of a greater awareness of the need for fraud prevention since corporate failures such as Enron.
"In emerging markets, there is a big demand for forensic skills because they can provide value that is harder to get in the mainstream accounting functions," Bowra said. "You need to know, for example, whom you're dealing with and whether the numbers are true or false because there isn't a lot of transparency in some emerging markets and yet they are the markets that people are now investing heavily in."
- KPMG has had a forensic practice in Hong Kong since 1993 and expanded into the mainland in 2004, setting up in Shanghai
- It is seeking to recruit experienced mid-to-senior-level accountants
- Candidates with accountancy, investigative or law enforcement backgrounds are preferred
- Qualified accountants with a commercial awareness, an understanding of human behaviour and the ability to think beyond the numbers are in high demand for forensic work