We’ve all been there, or you will be someday soon. That random dinner party or neighborhood block party where everyone’s making the requisite small talk and telling little anecdotes about their jobs. The third grade teacher has a story about that hilarious thing his student said today. The nurse starts telling a tear-jerker about the inspiring patient she’s been caring for. The sales guy just had box seats at the big game where he ran into that A-list star, and he’s got the “selfie” to prove it. And you’ve got a scintillating story about….um, a footnote disclosure?
But wait, I’ve got good news! First, take a second to realize that no one’s job is that glamorous all the time (the nurse left out the story about the bedpan she had to clean, for instance). But second, there’s a lot of amazing and exciting things to learn about – and take with you to dinner parties – in the world of forensic accounting. In fact, that’s essentially the answer I give when I’m asked what I like most about my job.
You see, with each case that rolls in, a forensic accountant needs to make sure they fully understand the business and industry surrounding the dispute. While you may be hired as a financial expert, all the number analysis in the world is ineffective if you have no idea how the business works. So we try to get a “mini-masters” on the business and industry for every new project we tackle. To educate ourselves, we determine which industry we’re researching within the standard industry classification system (often known as NAICS, the North American Industry Classification System) and obtain industry profiles using our membership with a few industry research companies. These profiles often just serve as a starting point, leading us to regional associations, specific industry publications, university research findings, or any number of other sources. All of this may seem a bit over the top when an accountant’s gut instinct is often to analyze historical performance and function within the vacuum of a Company’s general ledger. But it’s this “mini-masters” that not only makes you credible down the road, but it also helps to reveal otherwise hidden flaws in your (or the other side’s) assumptions. It doesn’t take a rocket scientist to realize that a homebuilder’s financial performance in 2005 is unlikely to be comparable to 2008 - everyone was well aware of the housing bubble and crash through this time period. But in many other industries, there are equally important and surprising bits of industry information that can make a notable difference in your case. This information also has the gratifying side effect of turning you into a veritable Cliff Clavin (if you’re under 30, you may need to Google that name) while making a notable difference on your case.
For instance, did you know:
- Steel mills’ productivity can be affected by previous seasons’ precipitation levels? (The raw materials are transported through locks and channels in the Great Lakes that periodically suffer from low water levels, limiting the capacity of the boats that transport the ore.)
- Jewelry stores often realize over 25% of their sales in the single month of December.
- Piglets are so susceptible to certain diseases; visitors to most pig farms have to wear full body contamination suits, a la “E.T.” to enter the premises.
- Some states have historically required that large propeller pieces utilized on wind farms must be transported one at a time by a police escort from the state line to the destination, significantly affecting the assembly time of new wind-farms.
- Melted butter will ruin fire-fighting equipment. Alright – that one was more a fun fact than critical to any calculation – but who knew?!
All of these little discoveries make a work day go much faster, and they improve the quality of your dinner conversations too! So get your education, conquer that CPA Exam, and get ready to head out in search of your next “mini-masters.”