25 years ago, a dream came true – Forensic Strategic Solutions (FSS) came to life! In October of 1992, FSS was created as the product of a plan to specialize in investigative financial services. We narrowed our scope to the specific field of fraud investigation, while also serving as expert witnesses on complicated financial matters. Many people thought such a niche practice would not be successful, but today, the industry continues to flourish. In fact, back in 1992, few people – especially in the general public – had even heard of forensic accounting. Most folks thought forensic accounting was providing accounting services to dead people!
To celebrate the 25th anniversary of our company, we are examining how the industry has changed, revisiting our most fond memories and forecasting how we predict both FSS and the industry will evolve over time.
What has been the most significant change in the industry since FSS opened?
Until the mid-1990’s, courts of law did not recognize anyone as a “fraud expert” – nor had they heard of a Certified Fraud Examiner (CFE). In the late 1990’s, the Association of Certified Fraud Examiners (which was founded in 1988) and its members were recognized by governmental agencies for their expertise in fraud detection and prevention. CFE then became a recognized brand of fraud experts. Even the television series, “The Sopranos,” identified the forensic accountant as an investigator and expert in fraud! Times were changing, indeed.
In 1997, the American Institute of Certified Public Accountants (AICPA) began requiring certified public accountants (CPAs) to look for fraud in financial statement audits. This was also the year AICPA first used the word “fraud” in any of the accounting professional standards or literature.
In July 2002, as a result of massive fraud schemes in publicly traded companies such as Enron, WorldCom, HealthSouth and Adelphia Congress, the Sarbanes-Oxley Act was signed into law. This legislation was enacted to require reporting companies to implement strong internal controls, enforce management, compel their auditors to make assertions about the reliability of financial statements, and ensure that the companies were free from fraud.
How have the industry and the company evolved over the past 25 years?
The enactment of Sarbanes-Oxley led to industry recognition and growth – consequently, many accountants began to hold themselves out as forensic accountants. To the true financial investigator, however, the industry, while growing, remains very small with only a few organizations and firms equipped with the necessary skills to successfully conduct financial investigations.
As for FSS, in the early days it was much easier to practice solo. As the industry has evolved and technology has exploded, it has become virtually impossible to successfully practice alone. Our firm has found continued growth and success by building a strong team of financial and technology experts whose individual areas of expertise complement and support each of our five integrated practice areas.
What is your most meaningful memory since opening the business?
I have watched, with great pride, as our team has continuously grown to new heights and successfully taken on larger and more complex engagements.
Personally, in 2010 I was recognized by the Association of Certified Fraud Examiners with the Cressey Award, which is the organization’s highest honor bestowed annually on one individual for a lifetime achievement in the field of fraud detection and prevention.
How has technology shaped financial investigation? Where was it 25 years ago, and where is it going?
Data mining and artificial intelligence are significant keys to success in a financial investigation – after all, knowledge is power. These tools allow investigators – and even auditors – to review and analyze all the data in financial records, NOT just test it on a sample basis.
CPAs and auditors have been extremely slow to embrace technology and artificial intelligence as a method to perform their work. Current professional literature touts these methods as new, novel and great ways to change the industry. We have been using these tools for over 20 years, which has been critical to our success in helping our clients to detect and prevent fraud.
Financial data tells a story – data mining, advanced analytics and artificial intelligence allows us to get behind the story and objectively dig out the truth, whether it’s in support of or in stark contrast to the story being told by the party we are investigating – which could be a company, the suspected wrongdoer, or the plaintiff or defendant in a litigated matter – you name it. Technology is one of the key tools in our forensic toolbox.
What do you deem important to the future of financial fraud investigation?
Financial fraud investigation has never been more important than it is today with the proliferation of electronic devices and communication. Bank robbers no longer need to leave the comfort of their homes to steal millions of dollars from banks, organizations and individuals.
Fraud investigators must continuously be trained in all aspects of a financial investigation, yet remain smart enough to know that as the complexity and sophistication of fraud schemes increase, they won’t be able to perform each aspect alone. Staying ahead of technology changes, understanding new fraud schemes, knowing how to legally and ethically conduct financial investigations and building expertise in interviewing are just of few of the critical skills involved in financial investigation.
Where do you think FSS will be 25 years from now? What about the industry?
FSS will continue to be a leader in the financial investigation niche as expert witnesses and financial investigators because of the expertise we possess and the recognition we have received. We will continue to strategically build our team of financial and technology experts. The firm will have double-digit growth for at least the next 10 years.
The need for financial investigators will continue to grow, but the firms providing investigative services will be small, niche firms who have the expertise I have discussed. Our world of real forensic accountants, not those who just claim to be forensic accountants, is limited to those individuals who have very unique skills, intelligence in the field and an undying passion to solve financial jigsaw puzzles.
We are so grateful to our partners, employees and friends who have been by our side throughout the incredible past 25 years. We look forward to seeing what the years ahead will bring!