Financial Forensics

We’ve all seen them: CSI, NCIS...all those forensic TV shows that made you sure you wanted to be a forensic investigator...because TV is totally like real life, right?

What they didn’t really show on those shows is financial forensics: the bad-guy catching glamor of TV with the un-glamor reality of knowing how to financially audit the bones off of someone. That’s right: financial forensics, the cool nerds. Financial forensics can be done by someone within an organization, or someone “on the outside.” It’s like armchair forensic accounting, except you could bet on it in the stock market and make some money shorting sketchy companies. All you need is a company’s financial statements, its filings, and the financial know-how.

Financial forensics isn’t only used to catch financial fraudsters, but also to prevent financial crimes and recover assets by following the money (literally). Anywhere there’s a money trail...from private companies to governments and nonprofits...there’s a potential for cooked books and theft.

Financial forensics done by a short-seller is what helped bring down Enron Corporation, which was violating rules and into all kinds of not-cool financial biddings, leading to its eventual implosion. A securities professional used financial forensics to notice the Ponzi scheme set up by Bernie Madoff. He even did the right thing and told the SEC about it, but they didn’t do anything for years.

Besides the money you can make doing financial forensics, there are also whistleblower awards. And the Best Fraud Alert Tweet goes to...