September 2024

Hello Students!

Accounting is important because it involves people’s money and money may be the most resourceful asset on the planet.

In the Purdue Global Accounting Program you will learn new skills in analyzing, classifying, recording, reporting, and summarizing financial data. Financial users are interested in accounting data to ensure the legal and ethical standing of the business, the tax status, the financial position, and the operating performance to discern important decisions that involve people’s money. An old humorous cliché evolved: “people are funny about their money” but money is certainly not funny.

Accounting is an ancient record keeping process accounted for throughout the centuries. The Scriptures impart wisdom as King David’s son Solomon, dubbed the wisest and richest man on earth and who loved a good party, determined money is integral to all other resources as he chronicled, “A feast is made for laughter, and wine makes merry: but money answers all things” (King James, 1769/2017, Ecclesiastics 10: 19). Thus, other resources rank below money classifying money supreme supporting the popular cliché “cash is king.” It will always be important to count money, keep accurate records, and account for resources making accounting an excellent career choice. Yet, progress in technology baits the question who will be counting the money?

Will AI replace human accountants?

The advent of AI has created a buzz about the future of accounting. Will AI replace human accountants?

While AI is changing the landscape of business and will potentially impact all career tracks, the need to verify data, problem solve from a human perspective, and recount the money continues to exist. Analyzing accounting information requires human analysis applying reason and trust. Machines cannot replace emotion, continue to lack human trust, and cannot make moral decisions. So far, machines have not outperformed humans in solving accounting problems (Marks, 2024).

However, there are some thought-provoking conversations currently under debate. Afterall, people are still funny about their money. We will attempt to delve into the advent of AI and the future of accounting in the next issue to address some of these concerns and continue to stay abreast of this ongoing dilemma. 

References

King James Bible. (2017). King James Bible Online. https://www.kingjamesbibleonline.org/ (Original work published 1769).

Marks, G. (2024, January 1). The (very) emerging role of AI In the accounting industry. Forbes. https://rb.gy/az7ppz

Sylvia DeAngelo, Ph.D.

sdeangelo@purdueglobal.edu

In recent years, the field of forensic accounting has grown by leaps and bounds. There are many fraud investigators with no formal accounting training. But those who have had formal financial or accounting training excel in this area. They understand and use forensic accounting techniques to make their investigation process more efficient and effective.

What is forensic accounting? The word forensic is defined by Merriam-Webster as “used in, or suitable to courts of judicature or to public discussion or debate”.  In the context of litigation, the term forensic means to be suitable for use in a court of law.

According to the AICPA, forensic accounting is the “application of specialized knowledge and investigative skills to collect, analyze, and evaluate evidential matter, and to interpret and communicate findings in the courtroom, boardroom, or other legal or administrative venue.”

The knowledge base for financial accounting draws not only from the financial and accounting areas, but also from:

·   Sociology – Offender and victim profiles, fraud statistics – type, frequency, costs

·   Psychology – Motives of white-collar criminals

·   Criminology – Crime theories, information sources, behavioral aspects

·   Legal field – Criminal violation statutes, rules of evidence; compliance with search and seizure rules

·   Computer forensics – Computer crime and cybercrime

·   Other forensic sciences – Hand-writing analysis, document analysis

In addition, a career in forensic accounting offers a wide variety of career options. Some of the areas that forensic accountants work in are accounting firms, law firms, regulatory agencies, insurance companies, government agencies, and law enforcement agencies.

Forensic accounting is also very closely related to the auditing field.  Knowing about forensic accounting techniques can also be valuable to students interested in auditing!  Purdue Global offers Advanced Forensic Accounting (AC465) as an accounting elective, and when students take this course, many are surprised by the depth and breadth of the field. One of the reasons that students find forensic accounting exciting is that fraud cases are always different! No two fraud cases are alike.

This series of articles on forensic accounting will explore the two main fraud theories adopted by the accounting profession, forensic accounting techniques, and finally, apply them to real world cases of fraud. 

References:

Forensic Accounting (aicpa.org)

Forensic Definition & Meaning - Merriam-Webster

Cynthia Waddell, PhD, CPA, CFE

cwaddell@purdueglobal.edu