Behind Closed Doors

California CPA magazine: September 2008

The New Certified in Financial Forensics Credential

In May 2008, the AICPA approved its fourth specialty credential, Certified in Financial Forensics (CFF), to enhance the credibility of CPAs practicing in the area of forensic accounting. So, what do these “CSI: Accountants” do?

CPAs who qualify for the CFF serve in many capacities. For example, a CFF might perform procedures to trace the flow of cash that was embezzled from a corporation, serve as a GAAP or GAAS expert in an alleged accounting fraud matter or compute economic damages in a litigated dispute.

In performing these and other types of work, CFFs may work for plaintiff or defense attorneys; government agencies, such as the SEC, IRS, U.S. Department of Justice or a state attorney general’s offices; or even directly for a company or its board of directors.

The AICPA anticipates that CPAs holding the CFF will derive a competitive advantage in obtaining new work and establishing expertise in courts of law. Its survey data of law firms found that three quarters expected a forensic accounting expert to have a specialized credential.

To become a CFF, CPAs must first have five years of experience practicing accounting and be an AICPA member. It’s noteworthy that the experience requirement is not necessarily in public accounting. Beyond those requirements, CPAs must accumulate at least 100 points and meet minimum thresholds in three categories:

1)    Forensic experience within the most recent five years (up to 60 points);
2)    Relevant continuing education (up to 60 points); and
3)    Other associated credentials such as the CVA (Certified Valuation Analyst) or ABV (Accredited in Business Valuation), CFE (Certified Fraud Examiners), or other possibilities such as juris doctor degrees (up to 35 points).

An AICPA standards committee will oversee the criteria for the CFF credential as well as review submitted applications.

Who Should Apply for the CFF?
This credential serves a broad group of CPA constituents. While it targets CPAs who perform fraud investigations, it has much broader appeal. It’s valuable for CPAs who serve in litigation support capacities and conduct computer forensics, as well as those who perform valuations and review bankruptcy matters. Additionally, both internal and external auditors will benefit.

As for us, we are applying because the credential signals that we are CPAs devoting a substantial amount of our professional time, experience and continuing education to forensic accounting.

Based upon our experience working for, or jointly with, law firms or government agencies, we appreciate their expectation that the CPAs they hire have a history of knowledge in this practice area. The CFF will be an important stamp of approval to fulfill that expectation. CPAs can be confident that the AICPA and CFF Credential Committee will focus on promoting the credential and its benefits to the attorneys and business leaders who forensic CPAs view as their primary target market.

This highlights the critical distinction between the CFF credential and forensic credentials available from other profit and nonprofit organizations: every CFF must first be a CPA. The authoritative, intense accounting knowledge and testing requirements of the CPA, combined with the body of knowledge and experience requirements of the CFF, ensure that every CFF has both the core accounting skills and the specialized knowledge to inspire confidence in those who contract for forensic accounting services.

An exam is being developed for future applicants that will cover a defined forensic accounting body of knowledge. While some have been skeptical about the lack of an exam for the initial applicants, the application process requires experience and a history of continuing education that serve as gatekeepers to initial credential holders.

Meeting a Need
“I have always thought that those who call themselves ‘forensic accountants’ should have some kind of designation to go along with it,” says Ron Durkin, CalCPA Litigation Sections chair and an early advocate of a forensics credential. “The CFF credential will help protect the CPA brand as well as keep those who are not qualified from doing harm to our profession.

When I was the chair of the AICPA Litigation Services Subcommittee, I heard a lot of horror stories about CPAs testifying without being adequately prepared. Unfortunately, many of those CPAs ended up in court themselves. I am very happy to see the approval of the designation and the interest in it by our members and the clients we serve. I also am excited to be a part of the community of forensics who will be called CFFs.”   

Greg Regan, CPA, CFE is a director in the Litigation and Forensic Consulting Group at Hemming Morse, Inc. B. Marie Ebersbacher, CPA/ABV, CFE is a director in the Litigation and Valuation Group at Mayer Hoffman McCann in Los Angeles. You can reach them at regang@hemming.com and mebersbacher@cbiz.com.