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Book takes a look at forensic accounting

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ERIN TIMONY / The State Journal. “Forensic Accounting” authors Robert Rufus and Laura Miller said the book required two years of research to get it into print. ERIN TIMONY / The State Journal. “Forensic Accounting” authors Robert Rufus and Laura Miller said the book required two years of research to get it into print.

When it comes to choosing a career, the options of "what" are seemingly endless.

Not only do jobs abound in numerous categorical fields, but within the field itself, potential jobs are broken down even further.

In the categorical field of accounting, forensic accounting is one of those examples and the fastest-growing niche in the accounting profession.

What is forensic accounting?

In the textbook "Forensic Accounting," written by Robert Rufus, Laura Miller and William Hahn, the often more obscure, but fast-growing, accounting practice is explained.

The MFA program has been in existence at the University of Charleston for about five years.

Rufus, who is the president and managing principal of Rufus and Rufus Accounting Corp. in Huntington as well as program coordinator and teacher of master of forensic accounting, or MFA, at the University of Charleston, clarified the difference between a regular accountant and a forensic accountant. 

"If you're wondering the difference between a forensic accountant and a regular accountant or regular certified public accountant, or CPA, it's that there are different layers of training and skills," he said. 

For example, Rufus said that a normal accountant is going to have a core set of skills — accounting, auditing and tax. Forensic accountants have core forensic training skills, which deal with the legal environment — what discovery is, what evidence is, what the federal courts are like, what the process is like, how to present evidence and how to articulate a legally sufficient opinion.

Beyond the core training skills, Rufus said there is something called "specialized knowledge," where forensic accountants may specialize in economic damages, bankruptcy or fraud. And once an individual "starts with this core skill set, then you build on that." 

Generally, forensic accountants are hired by lawyers to assist in litigation and, since litigation may be in a civil case or a federal case, Rufus said forensic accountants need special skills.

By definition, forensic means "suitable for the courts."

"When we talk about forensic accounting, it's the application of accounting concepts and strategies and processes in a legal setting," Rufus said.

Supplying the demand

One of the reasons Rufus, Miller and Hahn decided to write "Forensic Accounting" was due to the fact that there was simply not enough teaching material on that particular subject. 

In the past, Rufus said it was difficult to find a textbook that succinctly explained just what it is forensic accountants do.

"We could not find a textbook that said ‘this is what forensic accounts do and here's how they do it,'" he said. "We ended up having to get seven or eight different textbooks to offer what we needed for the masters."

Miller said Forensic Accounting should take care of that problem.

According to Miller, it's the "only text that provides an accurate comprehensive point of view of what the practice of forensic accounting is."

Although forensic accounting has technically been around since the 1930s, it is new in curriculum, which didn't make finding textbooks any easier, Rufus said.

"Academics, as a rule, are behind practitioners, so they're always catching up on making sure they can prepare students for the workforce," he said. "As forensic accounting evolved, practitioners or educators were searching for products. When we were searching for a product, we had the same hurdle."

Bridging practice with theory also was a motivating factor for writing the textbook.

"The textbook was an idea that was born when we were looking for textbooks for the program because as practitioners, and also as researchers, we were always looking to bridge a practice with theory and we could not find a textbook that would allow us to do that," Rufus said. "So we sat down and said we'll write our own textbook."

Making it easy to follow

In order to facilitate maximum understanding and comprehension for both students and teachers, the textbook uses a case-based approach. 

Every chapter has a case that incorporates and threads the concepts attempting to be taught. The textbook also incorporates web sites and web access. Students are also occasionally referred out of the textbook to sites like the Internal Revenue Service, and the Federal Bureau Investigation, to look at stories or cases.

"Most folks in academia will tell you that case-based education is the only way to go," Rufus said. "It makes it real. We can take what we really do and incorporate it with cases we've actually worked, add some learning notes in and teaching notes for instructors, incorporate some learning into chapter challenges and get students what they need."

Throughout the text, critical thinking skills and the scientific approach are of the utmost importance.

Rufus said critical thinking skills are important for forensic accountants in order to make sure one is making good and solid observations.

For those interesting in learning how to conduct fraud investigations from start to finish, "Forensic Accounting" covers that as well.

Looking at evidence and what it means, defining evidence, getting evidence in front of a jury as well as communicating the evidence all are steps in the fraud investigation process. 

Easy for the teachers, too

Not only was making "Forensic Accounting" easy for students to understand a priority, but the writers also wanted to make the information easy for teachers to understand.

"A textbook like this has to be not just attractive to students but attractive to the educators because we're really teaching them what forensic accounting is," Rufus said. "If you've been an educator all your life, you're not in the field. 

"You're in the classroom and as that discipline changes, you're not keeping up with the change. You're trying to grade papers, administer to students and coach.

"It's our challenge to say ‘here's a textbook that's easy to read, easy to understand, it's case-based and it will move you and your students to a different level.'"

"Forensic Accounting" also gives educators the ability to pick and choose which particular lessons in the book they would like to impart on their students.

While Rufus said adopting a new textbook is a lot of additional work for an instructor, Forensic Accounting hopes to alleviate some of that extra work.

"What we've attempted to do is make it easy but also make it exciting because we incorporate (case-based instruction)," Rufus said. "It's difficult, if you're a faculty member, to change a textbook because if you have an old textbook, you're comfortable with it." 

Most challenging aspect

For Rufus, the most challenging aspect of the two-year book writing process was the turnaround period.

"(The textbook) was much more difficult than I would have ever imagined. I thought it would be a piece of cake," he said. "I thought we'd go through this in a year and have it out on the marketplace … in six months. 

"We were constantly trying to educate the people that were working on our product to understand what the product was about."

However, the reward of the final product outweighed any occasional bouts of frustration during the process, Rufus said.

"It was more rewarding than it was challenging," Rufus said. "Every time I would get frustrated I would sit down and say, ‘I'm a better practitioner; I'm a better educator as a result of having gone through the experience.'"

Clearing up misconceptions

One of the common misconceptions about forensic accounting is that it is only about fraud investigation, said Miller, who is a forensic analyst at Rufus and Rufus an instructor in the MFA program at University of Charleston.

"Whereas that is a significant component of accounting work, but it's only one component and there are several others," she said.

What also adds an individual dynamic to the textbook are the authors — two practitioners, Rufus and Miller, and Hahn, a full-time academic.

"We really brought that unique aspect to the book," Miller said. "That's not only what the instructors were looking for but also the students, especially in the recent economic environment, where students are really looking for value from a college education and ‘how do I turn that into a career?'''

According to Rufus, the first forensic accountant was Frank Wilson, an IRS special agent in the Al Capone case in the late 1920s and who was awarded that distinction because of his critical thinking skills.

Rufus also said that forensic accounting is really not about doing accounting work.

"Most forensic accountants are former federal agents, like myself," he said. "And then we start a forensic accounting practice and hire capable individuals."

Distributing ‘forensic accounting'

While it is not known which classrooms "Forensic Accounting" will make its way into, the book publisher responsible for circulation is Pearson. 

After the writers pitched the idea for the book and Pearson acknowledged that a void in the marketplace existed, the partnership was born.

Because "Forensic Accounting" was designed to be used at the undergraduate, graduate level and even by practitioners, Miller said it has a broad distribution base.

When it comes to the book's value, Miller said it goes beyond mere commercial effect. 

"We didn't know exactly what we were getting into, but there's value beyond commercial effect," she said. "Regardless of the actual distribution, it's made us better practitioners, it's made us better teachers and it's extremely valuable for the profession in general. 

"The demand is definitely there and growing. The supply has to catch up."

Miller and Rufus agree that though the process was long, and occasionally frustrating, the final product was well worth it.

"We're very proud of the final product," Miller said. "It was a long process but very rewarding. We're excited to see it distributed."