Continuing strong demand expected for forensic and valuation services
New survey finds 83% growth in niche area in the next two to five years.
May 21, 2012
Forensic and valuation services have long been considered hot practice areas, and there is now convincing evidence to support this idea. A new AICPA Forensic and Valuation Services Section study of professionals working in this niche found strong demand for these services. The vast majority of survey participants expected that demand to remain robust during the coming two to five years, along with an increase in litigation and regulatory enforcement. The study also identified the greatest challenges facing this niche in the near future and provided valuable insights into trends in different segments of this practice area.
A practice area and its challenges
When they provide forensic accounting services, CPAs use specialized knowledge and investigative skills to collect, analyze, and evaluate evidence and interpret and communicate findings in the courtroom, boardroom, or other legal/administrative venue. Clients are typically attorneys and businesses in a broad range of industries.
Trends in FVS segments
Forensic accounting encompasses many kinds of engagements. The survey offered numerous insights on trends in various segments of this niche, including:
Keeping talent on tap
Given the robust need for forensic and valuation services, it’s clear that staffing —the top challenge identified by survey participants—will remain a key issue. Roughly one-quarter of survey respondents said they had hired more professionals recently and many planned to do more hiring in the next two to five years in a variety of areas. Approximately one-half of those who participated in the study said they devoted more time to forensic work during the past year, with an impressive average increase of 20%. The majority of business and industry professionals (B&I) studied in a companion survey said they used outside valuation experts, underscoring the demand for these services.
As a result, it’s fair to assume that the recruitment, retention, and continuing education of FVS professionals will be an ongoing priority. While this scramble for talent may pose challenges for firms in this field, it also attests to the likelihood of strong employment.
Technology is another issue that made the top five. Practitioners may confront problems in staying current with advances in technology that can significantly alter and improve the way they conduct research or approach other areas of their practice. “For smaller FVS firms, there are increasing challenges in keeping up with the evolving technologies necessary to respond to client needs,” says Ronald L. Seigneur, CPA/ABV/CFF, ASA, CVA, of Denver-based Seigneur Gustafson LLP.
When it came to the use of technology in this area, 81% thought computer-based controls would significantly improve fraud detection. At the same time, respondents believed that the greatest technology-related threats to organizations in the coming two to five years included:
A look at B&I
In addition to the study of CPA forensic accounting professionals, the AICPA FVS Section also surveyed professionals in B&I to gather their feedback on working with forensic accountants. In this study, 54% said that in the next two to five years their companies’ efforts to prevent or detect fraud would heighten their use of outside consultants vs. in-house personnel. With more clients turning to them for help, the B&I survey results provide valuable information for FVS members on the trends affecting their clients, how they are responding to them, and which services they may need from outside experts, including details on approaches to preventing and detecting fraud, experiences with economic damages and financial statement representations cases and shareholder disputes.
A wealth of practice opportunities
Forensic and valuation services are clearly a thriving field, one in which a main challenge will be maintaining adequate staffing to handle a wealth of practice opportunities. Access and read the full AICPA FVS Trend Survey white paper on the AICPA’s website. Those seeking more information on this niche should look into the many resources available through the AICPA Forensic and Valuation Services Section.