3 Business Lessons From A Forensic Accountant

Danielle Supkis Cheek CPA, CFE, CVA is a VP at MindBridge and is a 4-time U.S. Most Powerful Women in Accounting.

When people hear that I am a CPA, they ask me tax questions; however, when I say I am a forensic accountant, people assume I live life like a TV crime show. Of course, the truth lies somewhere in between. What people don’t realize about forensic accountants is the breadth of experiences we observe of organizational and human behavior in some of the hardest situations for companies or people to find themselves in. It gives you a different perspective that can have great implications on your approach to business.

Here are the top three business lessons I have learned from my work as a forensic accountant.

1. Do not think you are immune to committing fraud.

The most basic model of fraud is called the fraud triangle, coined by Dr. Donald Cressey. The model hypothesizes that where there is (1) pressure, (2) opportunity and (3) rationalization, you are a higher risk for fraudulent behavior.

I tend to not trust people who tell me they would never commit fraud. When I hear this comment, I translate it as a lack of self-awareness of the pressure that can be exerted on them to make them change their behavior. I, like most people, believe I am a highly ethical person; however, I see many situations wherein, due to one’s family being in duress, people act contrary to their normal behavior in order to protect their family.

I also realize that I could rationalize this as the only option to protect my family and tell myself that once whatever imminent danger was over, I would be able to assist in righting the wrong I had committed.

That’s the reason when I am consulting with a business, I look to take away such opportunities by designing processes and controls. I also believe that eliminating opportunities for fraud helps protect people from ever being forced into such an impossible dilemma.

2. Suspend judgement.

Since I can imagine a horrible situation in which a person can feel forced into committing a fraud, when I am doing investigation, I go to great lengths to remove as many personal biases as possible and operate as neutrally with each party as I can. To the greatest extent possible, I also put myself in each party’s shoes to attempt to look at a situation or circumstance from their point of view.

It is very easy to let your mind jump to judgement over an action, When I see myself do this, I ask myself: Why would that person act in that way? I start to come up with as many logical stories or reasons that would make sense for that person to act in that way. By the time I have come up with a couple of reasons, I am no longer making a judgment on the action, but see it as a response to a variety of circumstances. And now can form a hypothesis to investigate.

Forensic accountants are also trained that they cannot themselves deem an action to be fraud or not, as that is for a trier of fact (i.e., judge or jury) to determine.

In business, this mindset allows me to see someone else’s point of view very quickly. The fact that I have done it many times allows me to better anticipate outcomes. I am also usually able to collect more data more quickly than others, which has improved my quick decision-making capabilities.

3. Pay attention to everything.

Many people conflate the concepts of perfectionism with someone who simply has a high attention to detail. I have a very high attention to detail, but I am quick to let things go out when they are good enough. Many times, there is not enough marginal value for the cost to get a better-quality output. This is the concept of the law of diminishing marginal returns or cost-benefit analysis.

In forensic accounting, you will see a lot of details all the time and it is hard to synthesize all the information coming at you. However, when I am working on a matter, I am paying attention to everything that I can.

I once recognized the name on the notary stamp on a key document that I only got to see for a split second. That ended up being very material to the matter I was working on. When I visit facilities, I am looking at how it is organized, whether there are spiderwebs, what it smells like, how dusty it is, etc. All of the details may seem mostly meaningless as I am collecting them, but once I get to some other record or fact, I may use all those details to see what does and does not make sense.

In business, I get accused of doing too many things or lacking focus. The irony is that what I am doing is highly focused. I am doing a lot of things as I get everything to be good enough and then move on to the next item. Then, due to the breadth of what I have access to through my work, my “good enough” ends up being more well-informed than others who might put in more effort on a single task.

The trick in being high in attention to detail and getting everything good enough to move on is determining what is the bar for good enough. Since I also work as a professor and most people have familiarity with grading scales, I use a C+ to A+ range to talk about the quality of the end product. For most of my work, I am targeting to a solid B+/A-. But it is imperative to know when the work needs to be at an A+, and that is also a part of paying attention to everything.

Preparation is key.

One of the hardest parts about being a forensic accountant is seeing the pain and aftermath of the situation as experienced by my clients. Hopefully these lessons will provide some positive consequence from some otherwise difficult and unfortunate situations.

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