Developing the next generation of forensic accountants

As the accounting field braces itself for staff shortages, it’s now more important than ever to ensure that young fraud fighters are prepared to meet future challenges. Here, the author provides training techniques that he’s employed to train new employees and pass his wealth of knowledge on to the next generation.

Helping a new colleague acclimate to investigations during an engagement can be difficult for veteran forensic accountants, but taking the time to train new employees will pay dividends in the future. The level and breadth of knowledge required to succeed in this industry can be insurmountable without proper training; seasoned fraud investigators have that breadth and wealth of knowledge to pass on to the next generation of anti-fraud professionals.

Veterans of this profession have a duty to train and develop the next generation of fraud fighters. Brief deadlines, staff shortages, and looking ahead to the next engagement might be excuses to avoid taking the time to properly develop and train your team, but it’s imperative that we attract and retain talent. According to the American Institute of Certified Public Accountants (AICPA), 75% of CPAs are set to retire within the next decade and not replacing them with a younger generation of well-trained accountants means that organizations lose an important safeguard against fraud. In 2023, companies like Advance Auto Parts, Joby Aviation and German biotech company Evotec disclosed material weaknesses in their financial statements due in part to a lack of accounting staff. (See “The Aging of the Accounting Profession,” by Barry R. Palatnik, EdD, MBA, CPA, and Rachel Serebnick, NJCPA, April 28, 2023; “The Accountant Shortage Is Showing Up in Financial Statements,” by Mark Maurer, The Wall Street Journal, July 11, 2023; and “Should CFOs be worried about the accounting shortage?” The CFO, April 18, 2024.) To ensure a future with a deep bench of skilled accountants, there’s no time like now to develop a training plan to pass your fraud-fighting skills on to the next generation.

In my own experience training new employees, I’ve found much success combining a formal training program with on-the-job training from ongoing cases. A comprehensive training program should be well defined with achievable goals. For example, you might include requirements for completing continuing professional education classes to obtain certifications such as the Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE) credentials, as well as requirements for developing technological skills. The following are some training and development methods that I’ve used to train new employees that you can easily implement in your own training program.

Case studies

When I first started out in the accounting field, I struggled to understand the “big picture” of the cases I worked on. Often, in those early cases, I was assigned smaller tasks, such as inputting financial statement data into an Excel spreadsheet, without explanation as to why I was doing that work. A litigation case can take years to complete, so it’s difficult to see where you are in the process until you’ve completed a cycle. But over the years, as I grew into my expertise, I came to see how studying past cases can help us to better understand the “big picture” of our present cases. Case studies are invaluable tools for rising forensic accountants to develop their critical-thinking and problem-solving skills.

By giving employees a raw dataset from a past case, along with documents related to the case (e.g., court pleadings and engagement letters) you’re teaching them how to lead a real-world engagement from start to finish, complete with challenges and conundrums they’ll most likely face during an investigation. You can purchase training materials from the Association of Certified Fraud Examiners (ACFE), the AICPA or other organizations, but you probably already have some of the best training materials available at your fingertips, stored on your work computer.

Retrofitting previously completed engagements into tailored training exercises for your newer employees is an opportunity for them to develop their skills for your firm’s forensic specialties and boost their confidence in their fraud examination skills. It’s a way to instill confidence in new hires and show them that they have the skills necessary to succeed.

Creating a new case study is as simple as duplicating your existing case folder and removing existing work product. Then, the employee has a fresh folder and the freedom to develop an approach to tackling the case based on existing pleadings or client emails. Since these cases are complete, you already have the knowledge and expertise to answer any questions they might have. Just remember to avoid using engagements that were subject to nondisclosure or confidentiality agreements.

Imposing artificial case-management deadlines on these sample studies serves to imprint key soft skills early on. A new employee may see a sample “court-appointed” deadline and naively strive to complete their analysis by that date. They might not realize that an internal or external review could leave them scrambling to change their analysis at the last minute. Having your employee walk through their work during a review also serves to develop communication skills to present their findings and recommendations to stakeholders such as clients, attorneys and law enforcement in a timely manner.

Shadowing

Shadowing sessions demonstrate the art of client services, from offering clients potential solutions to their problems and asking relevant follow-up questions, to effectively marketing services. While it might seem counterproductive to include interns and staff in prospective client meetings, doing so promotes development through observation. I’ve observed through my personal experience training new hires that those who silently observe fraud interviews, client meetings or meetings with counsel early in their careers can conduct their own meetings faster than peers who didn’t get the same opportunities. Having these conversations becomes second nature by the time they’re ready to conduct these meetings on their own. This firsthand exposure to the dynamics of decision-making equips staff with the skills and judgment necessary for handling similar challenges in the future.

Being able to observe your interactions with clients and other professionals also gives staff members a chance to build their professional networks. It’s an early opportunity to foster relationships in the forensic accounting community. And it doesn’t hurt to have an extra note-taker during meetings.

Chapter of the week

Think of this as a pseudo-book club to distill complex reference materials into easily digestible bites. I remember walking into my boss’ office early in my career and seeing a daunting collection of thick reference books, thinking they were for display only. But those books served a purpose for my boss, who often referred to them during an engagement. Reading a chapter from a book every week or two and holding a discussion to address questions can impart formal knowledge over time that likely would’ve sat on a shelf collecting dust. By dedicating time each week to a chapter from a relevant reference book, your team can accumulate knowledge in a structured environment.

To maximize the benefit of this development strategy, it’s essential to select reference materials that align with your team’s objectives and subject-matter expertise. Whether it’s on forensic auditing techniques, fraud examination methodologies, valuations or economic damages, the book review should be both informative and practical. By fostering continuous learning, encouraging practical application and promoting a collaborative learning culture, organizations can ensure that their teams are well equipped to navigate the complexities of the ever-evolving field of forensic accounting. [See sidebar “Suggested reading for ‘chapter of the week’” at the end of this article.]

Mock interviews

Provide trainees with a simulated, controlled environment in which they can practice their client-interviewing skills without the stress of real-world consequences. These scenarios should closely mimic the complexities and nuances they might encounter during actual fraud investigations so that they can learn to navigate any number of challenges that might arise on the job.

Consider requesting the help of a colleague or friend unknown to your employees to simulate a real interview. With mock interviews, employees learn to establish rapport with subjects, ask probing questions and elicit crucial information from interviewees. Moreover, mock interviews are an opportunity to develop active-listening skills, observe body language and quickly adapt to a variety of unexpected situations.

Take the reverse of the mock interview and put the employee in the “hot seat” to teach them about testifying in court as an expert witness. You can interview the trainee about their work product as a tool to receive constructive feedback, refine the logic behind their methodologies and enhance their communication skills. Putting them on the “stand” has the added benefit of getting them to consider a change in perspective regarding their approach to work in the future, if necessary. New employees can emerge from this training with all the tools required to produce technically sound and compelling analyses.

As fraud continues to evolve and adapt, so must fraud fighters. Ultimately, your employee training and development program should be structured to the individual needs of your group. Effective training also involves learning from your employees and getting feedback from them about their learning styles, then adapting your program to meet those needs. An equal, if not greater effort must be made by the teacher so that the student can thrive. Together we can develop the next generation of fraud fighters.

“One learns from books and example only that certain things can be done. Actual learning requires that you do those things.”

— Frank Herbert, from “Children of Dune”.

Alexander Dokuchaev, CFE, CPA/ABV, is a manager in the Forensic Consulting Group at CBIZ. Contact him at Alexander.Dokuchaev@CBIZ.com.

Suggested reading for “chapter of the week”

1. “Valuing a Business, 6th Edition: The Analysis and Appraisal of Closely Held Companies,” by Shannon P. Pratt and ASA Educational Foundation, McGraw Hill, 2022.
2. Fraud Examiners Manual, by the Association of Certified Fraud Examiners.
3. “Determining Economic Damages,” by Stanley P. Stephenson, Ph.D., and David A. MacPherson, Ph.D., James Publishing, 2016.