Introducing Diploma of Investigative and Forensic Accounting: A Case Study in Lebanon

DIFA, Diploma of Investigative and Forensic Accounting, is gaining acceptance due to its importance in facing corruptive business practices and financial theft. However, the absence of Forensic Accounting (FA) is still noticed in countries of opaque business practices. Furthermore, only few universities across the world are introducing DIFA, thus a major work has to be done to shed the light on the importance of the diploma in the first place and then offer it as an official diploma with courses relating to FA whether in universities or financial institutions.

The major concern lies in the fact that Forensic Accounting is neither provided in universities as a diploma, nor at financial institutions to detect fraud and make legal court reports. In many universities of Canada and the United States, the DIFA, is being included in the curriculum in order to recruit new students and provide skills set for career advancement through development of a specialized niche. One of the objectives of the Alliance for Excellence in Investigative and Forensic Accounting (Alliance), established by the Canadian Institute of Chartered Accountants (CICA), is to develop and manage a specialist certification program. This diploma is designed as a comprehensive program for someone who wishes to practice in this area. CPA, CFA, CIA are examples of certificates granted in Lebanon, however, no diploma is available related to Forensic Accounting. Therefore, it could be a diploma given in educational institutions that grant CPA or any other certification related to auditing or accounting.

Furthermore, the importance of adopting FA in the universities’ accounting curriculum is highlighted especially that its demand for it is increasing gradually. Such adoption has a huge potential to enhance students’ skills and competencies and could be used as a veritable resource from which fraud could be mitigated. Fresh graduates can as well attain the DIFA program that provides a broad range of knowledge and skills to carry out financial investigations. This range includes accounting, audit, income tax knowledge, fraud knowledge, knowledge of law and rules of evidence, an investigative mentality and critical skepticism, understanding of psychology and motivation, and strong communication skills (Stott, 2005).

The program focuses on knowledge and skills that can be best taught and examined in person: such as handling a face-to-face meeting with a client, interviewing skills, and testifying in court as an expert witness. DIFA supports accountants with the knowledge and skills needed to bridge the gap between existing quantification models and principles and different litigation contexts (Stott, 2005).

Based on descriptive statistics of survey results conducted in Lebanon, being a country of opaque business practices, to identify the certificates that a forensic accountant must possess showed that:

  • 59.09% of the respondents thought that a forensic accountant should have a DIFA;
  • 31.82% proposed that CPA is the needed certificate (Certified Public Accountant);
  • 20.91% thought that CFA is the appropriate one (Chartered Financial Analyst);
  • 10.00% mentioned other types of certification.
  • 2.12% of the respondents didn’t find it necessary to have any certification to become a forensic accountant.

Furthermore, the relation between occupation and the respondents’ opinion about the types of certifications that a forensic accountant must possess was also studied. The following breakdown shows the percentages of respondents who proposed that DIFA is the important certification based on job occupation.

  • 69.10% of the respondents working in banking or insurance
  • 51.60% of the respondents working in finance
  • 72.70% of the respondents working in education
  • 80% of the respondents working in management

However, most of the respondents in the accounting field thought that CPA is the type of certification that should be possessed by the forensic accountant with a 77.10%. People working in accounting usually tend to pursue a CPA degree for the help it provides in this domain.

In addition to the above, the relation between experience and the respondents’ opinion about the types of certification that a forensic accountant must possess was also studied. The results, based on those who choose DIFA as the needed certificate, were as follows:

  • most respondents with more than two years’ experience thought that DIFA is the needed certification to practice FA
  • 51.90% of respondents with 2 years’ experience and less thought that DIFA is the needed certification to practice FA;
  • 68.80% between 2 and 6 years of experience thought that DIFA is the needed certification to practice FA;
  • 55.40% of those with less than 2 years or no experience at all thought that CPA is the type of certification that should be possessed by the forensic accountant.

Moreover, the surveys conducted answered the question whether the respondents approve that the DIFA should be included in the Lebanese university programs. It demonstrates that:

  • 97.88% of the respondents accepted having a DIFA in the universities;
  • 2.12% of them didn’t accept having a DIFA in the universities;

This is especially important since most of the Lebanese people are in the stage of pursuing their educational degrees of which the highest percentage is studying finance.

Supporting the results of the surveys, interviews were also conducted to know about the type of certificates that a FA must hold. Most respondents approved that there should be a certification granted to a forensic accountant. This can be illustrated by what the accounting manager at “Malia Group Multinational Company” (with 5 years of experience) stated by saying: “It should be taught in universities and the business owners should request in their vacancies for an accountant with a certain certifications such as DIFA”

The interviewees’ answers stressed that it should be introduced in all universities and educational institutions leading to a certificate (DIFA), and candidates should have knowledge and a degree in accounting and auditing. As one interviewee, a partner at Bureau d’Analyse et de Revision Comptable (BARC) for auditing and taxation (with 33-36 years of experience) puts it: “It is a way to prevent corruption this is why I specify that it should be taught in universities because I strongly agree that it is implemented”. Relating interviewees’ recommendations to include FA in university programs, the head of audit department at “professional auditors” (11 years of experience) states: “FA is important for cheating methods, it can be introduced in universities“.

Interviewees gave different responses and suggestions about what is needed to perform Forensic Accounting. One interviewee coded that: “There are specific teaching programs such as CPA and there are special programs for certified financial forensic and DIFA”(Partner of an audit and taxation firm “Bureau d’Analyse et de Revision Comptable with 33-36 years of experience). Thus interviewees thought that a forensic accountant should be an experienced auditor or has a deep knowledge in laws; the type of certification needed could be CPA (certified public accountant), or have a license in accounting, a certification or a diploma from the LACPA (Lebanese Association of Certified Public Accounting). For instance the head of the audit department at professional Auditors indicated that: “Of course you need to have a license in accounting and maybe CPA, for example in our LACPA Lebanese association of certifies public accounting maybe you can get this diploma there”.

Other interviewees said that FA should obviously have a degree in accounting besides the needed experience to be able to detect suspicious acts, or have a BA degree with issues related to fraud and disclosure, CPA is a plus, or maybe have CFE. A lecturer and former partner at KMPG (with 15 to 17 years of experience) commented on this matter by saying: “On the educational level the best certification would be CFE if anyone wants to be involved in that topic he must go for such certification specialized in fraud examination”.

If anyone seeks to be involved in this domain he must go for such certification specialized in fraud examination. Others said that FA already has CPA or long experience. Furthermore, a forensic accountant, as an auditor have stated: “should have investigative skills and you should do the proper training in order to be competent”. Other interviewees also noted that a forensic accountant should have investigative skills and undergo proper training in order to be competent or be a certified accountant with certain skills and experience; the certifications needed are an accounting degree or a law degree since the forensic accountant may have to testify in courts. Or have a formal education in fraud; certifications could be CPA or CFE.

Another important statement coded from the interviewees is that “To become a forensic accountant, you need to be a certified accountant with certain skills and experience, the certifications needed are accounting degree or law degree since the forensic accountant could testify in courts” (Accounting Manager at Malia Group, with 8 years of experience).

In other words, FA accountants should be accountants in the first place, no specialized certification, but should be involved in training workshops or seminars that help enhance his knowledge and skills, or be an accountant or audit with knowledge about relevant laws. An accounting degree is enough but it would be better if he could take courses in investigative accounting if they are available in Lebanon. In addition they should have a degree in accounting with a profound experience and analytical skills; a certification would be a plus such as CPA or any other certification in accounting and auditing field.

Interviewees also reported that the certification that could be held by forensic accountant to practice FA is CPA since it is well known because it is available in many educational institutions. Almost all respondents conferred a high degree of importance for introducing FA in the educational sector in the financially corrupted countries.

Almost all respondents believed that FA should be taught in universities as a course or a graduate major or as case studies in an audit related course. Suggestions also included that FA could be a specialty in educational institutions that grant CPA or any other certification related to auditing or accounting.

Respondents and interviewees also suggested introducing FA through workshops and seminars with the assistance of experts and skillful forensic accountants. They also showed acceptance for online educational programs since DIFA is not available in most financially corrupted countries while it is available in the USA. Therefore online education could shorten the distance to people who cannot leave work and are interested to be specialized in forensic accounting.

The participants also recommended that the employees and managers, who are responsible for the financials of the company, should be educated and submitted to an intensive training to develop their skills to enable them to detect fraudulent activities within the company.

In sum, DIFA is designed to provide a broad range of knowledge and skills to carry out financial investigations. Employee and management fraud, theft, embezzlement, and other financial crimes are increasing, therefore accounting and auditing personnel must have training and skills to recognize those crimes. In addition, high-visibility corporate scandals, such as Enron and WorldCom, demonstrate the need to better prepare entry-level accounting graduates and practicing CPAs in the areas of fraud prevention, deterrence, detection, investigation, and remediation, Houck et al., (2006). Universities and educational institutions, as will be discussed later on, play a vital role in introducing DIFA and other FA related courses, certificates and diplomas. These formal certificates can deepen the students’ knowledge and sharpen their skills in Forensic Accounting through trainings under the supervision of an experienced forensic accountant, participating in various international conferences, reading relevant journals, books and other literature.

  1. Universities:

Universities play a constituent role in introducing FA since they can control the materials that could be taught to the students. Introducing it as a degree, Forensic Accounting could be one of the majors that exist in universities; the study proved that there are some educators who are knowledgeable in the field since most of them did their doctorate degree in the USA and UK. Therefore it could be an undergraduate or graduate degree in the universities.

Concerning the courses, Forensic Accounting could be given as a course in the university instead of being a major; it could be included as part of accounting, CCE, Law or any other major but customized for each specialty.

Regarding the case studies, in case FA is not considered as a major or given as a course, it could be highlighted through case studies where the students analyze many international fraudulent cases and the methods and the logics that were used by forensic accountants to detect and reveal the fraud.

  1. Educational Institutions:

Educational Institutions complete the role of the universities by covering the gap when some of the courses and degrees are not granted by the universities; they would be available in educational institutes or academies. The major course of actions that could be taken by these institutions is granting DIFA which must be an official certification given to the experts that want to practice Forensic Accounting in their countries. Yearly or monthly sessions must be announced through specialized means of marketing. Moreover, the certification could be incorporation with the government where certified accountants working in their departments and institutions could be sent to acquire it from a reputable educational institution. This certificate should be officially recognized and certified from the ministry of education, finance, and justice. The syndicate must hire qualified forensic accountants capable of studying, analyzing, suggesting policies, and training others.

Houck, M., Kranacher, M., Morris, B., Riley Jr, R., Robertson, J., & Wells, J. (2006). Forensic accounting as an investigative tool. CPA Journal. Aug2006, Vol. 76 Issue 8, p68-70. 3p,

Taha, N. (2014). Forensic Accounting in Countries of Business Opacity (1. Aufl. ed.). Saarbru�cken: LAP LAMBERT Academic Publishing.

Stott, M. (2005). “The Role of Investigative and Forensic Accountants and their Importance in Maintaining and Enforcing the Integrity of Canada’s Capital Markets”

Creating a Culture of Accountability

Airports are great places to get surprised and meet some wonderful people. During few occasions, I happen to meet few celebrities, politicians, my former colleagues and bosses and sometimes I chanced upon few people who are connected with me on Social Media, such as LinkedIn and Facebook. That day while I was traveling from Pune to Delhi through Spicejet (SG 184), I happened to meet Mihir Jaitley – the CEO of a leading multi-billion USD Automobile Conglomerate. Earlier I had met Mihir during few NHRDN and other leadership seminars and conclaves. However, getting a chance to talk to someone, who is as influential and successful businessman, as Mihir in a one-on-one conversation at an airport is a very different experience than asking them a question during leadership conclaves. I was not very sure if I should go and say, “Hello” to him or just let this opportunity go. Missing such an opportunity would have been very idiotic on my part. So, I gathered all my courage and walked towards him.

“Hello Sir, I am Sanjeev. I have heard you and met you during few leadership conclaves. Last, I heard you were in NHRDN conclave in Mumbai during 2014″, I said.

We raised our arms for a warm handshake.

“Hey, Sanjeev, it is nice meeting you. How are you”, he asked.

“I am good, Sir. Thank you. It is really nice to see you here”, I responded.

“Sir, you have unique ideas about how HR can contribute to the growth of an organization. Very unique from other business leaders”, I continued.

“Thank you, Sanjeev. What do you do?” he enquired.

“Sir, I work as Independent Management Consultant for last 1.5 years. I help start-up ventures; small and mid-size organizations in setting up HR Processes & Procedures, as well as helping them improve the performance of their employees. I also help organizations in preparing and grooming their new managers and coaching leaders for bigger roles. Before this, I have worked for 15 years with few organizations across India and outside of India”, I gave thorough reply while extending my business card to him.

“That’s very impressive. I like the phrase that you used in your description, “help”. Consultants don’t give free help. They charge a lot of money”, he replied with a sarcastic smile on his face, while extending his business card.

“Do you think anything can be done to improve the accountability of managers and leaders in an organizational set-up? Have you done anything in those lines”, he asked curiously.

As we were discussing, Spicejet staff made an announcement for boarding the plan.

“Sir, poor accountability is not a concern of one organization or an industry. It is there in all industries. I think the primary problem is not with managers or leaders but the way accountability has been defined. By definition, it appears like an attempt to fix the blame for a failure or crisis rather than giving an empowerment to concerned leaders to find a solution. When it comes to fixing the blame, many leaders are likely to surge it off”, I gave an empathetic reply.

“Yes, I have helped few organizations in making their leaders more accountable. I will be glad to help you too, if I get a chance to meet you again and explain the process”, I continued.

“Well, I just asked you this out of curiosity. We don’t have any such problem in our organization. However, I would like to know more about it. For next TWO weeks, I will be traveling out to other offices. I will give you a call after that. Let’s meet sometime”, I responded.

“Sure Sir. I will look forward to meeting you again. It’s been nice meeting you”, I told, as I picked my laptop bag to board the plane.

“Same here Sanjeev. See you. Bye”, he responded.

I didn’t get any communication from Mihir for one month. And I was in this state of confusion and anxiety. Should I wait or send a communication? Should I call him or send an email? He must be busy or else he would have sent some communication. Maybe he just said that he want to meet, in actual he don’t want to. Okay, let me send one email and see if he will respond or not. It’s just an email.

I sent a short email to Mihir, giving him a summary of our meeting and asking him if he would like to meet to take it further.

To my surprise, I received a reply from Mihir within one hour, sent through his iPhone, informing me that he remember our meeting, however, he is still traveling and will get back to me as soon as possible.

I didn’t get any communication from him for another TWO months, neither did I bother to send another email to him or call him. Then one day, on Tuesday, in the month of August, almost after six months of our airport meeting in February, I received a call from Mihir asking me if I am free on Friday and if I will be able to come to his office at 3 PM? I responded with affirmation. I had two days to prepare my presentation and be ready for, probably one of the biggest client meet at that point of time.

I was rehearsing my presentation as I was driving my black color Mahindra XUV 500 to his office in Chakan MIDC near Pune. After reaching the office, I was guided to the conference room. Mihir joined me in the conference room, along with a team of SEVEN people, including Head of HR, Nilesh Gaikwad. I was given ONE hour to complete the session.

Here is how I made the best use of it.

The majority of people in organizations today, when confronted with poor performance or unsatisfactory results, immediately begin to formulate excuses, rationalizations, and arguments for why they cannot be held accountable, or, at least, not fully accountable for the problems.

Most frequently heard statements are:

“That’s not my job”

“There’s nothing I can do about it”

“Someone ought to tell him”

“All we can do is to wait and see”

“Just tell me what you want me to do”

“If we only had the resources”

“The competition outsmarted us”

“The whole economy’s in trouble”

I am sure you might have heard these excuses from your team members and there are also chances that you have given these excuses to your teams, board of directors, customers, etc. Whatever the wording, all our justifications for failure focus on “WHY IT CAN’T BE DONE’, rather than on “WHAT ELSE I CAN DO.”

Let us first understand the meaning of accountability. (I asked the audience to share their understanding of the word accountability). Many people, including leaders, have totally wrong understanding of “Accountability”. They believe,

“Accountability means finding out who is at fault when something goes wrong.”

“Accountability is used to punish people for poor performance.”

“Accountability is management driven: it’s external, not internal.”

“Accountability means responsibility and obligation. It’s when someone outlines what you are supposed to do in a job description and then rates you A, B or C.”

“Accountability is something that is put on you by your boss. It causes unnecessary pressure, fear, regret, guilt, and resentment.”

“Accountability means being willing to stand up and explain what you did.”

“Accountability is a tool that management uses to pressure people to perform.”

The dictionary meaning of accountability is – the quality or state of being accountable; especially: an obligation or willingness to accept responsibility or to account for one’s actions.

By this definition, people only perpetuate a reactive perspective of accountability, one obsessed with the past and blissfully ignorant of the future. Consumed with dotting the “I’s” and crossing the “T’s” of their elaborate explanations for why they’re not responsible, people today are robbing themselves of the power of accountability – a power that The Oz Principle defines as the key to a successful future. In such cultures, winning in the game of life includes “covering your tail”.

The best definition of Accountability, therefore, is what has been explained in Oz Principle:

“Accountability: An attitude of continually asking “what else can I do to rise above my circumstances and achieve the results I desire?” It is the process of “seeing it, owning it, solving it, and doing it.” It requires a level of ownership that includes making, keeping, and proactively answering for personal commitments. It is a perspective that embraces both current and future efforts rather than reactive and historical explanations”.

There is a thin line that separates success from failure and the great companies from the ordinaries. Below that line is a set of individuals or leaders that foster a culture of excuse making, blaming others, confusion, and an attitude of helplessness. While above that line are individuals, leaders and cultures that breed an environment of a sense of reality, ownership, commitment, solutions to problems, and determined action. While losers languish below the line, preparing stories that explain why past efforts went awry, winners reside above the line, powered by the commitment and hard work. People and organizations find themselves thinking and behaving below the line whenever they consciously or unconsciously avoid accountability for individual or collective results. Stuck in what we call the “victim cycle,” they begin to lose their spirit and will, until, eventually, they feel completely powerless.

Now, you must be thinking of “staying on the line”, well, neither individuals nor organizations can stay on the line between these two realms because events will inexorably push them in one direction or the other. While both people and organizations can exhibit accountability in some situations yet manifest victim behavior in others, some issue or circumstance will arise to influence them to think and act from either an above the line or below the line perspective.

When individuals, teams, or entire organizations remain below the line, unaware or unconscious of reality, things get worse, not better, without anyone knowing why. Rather than face reality, sufferers of this malady oftentimes begin ignoring or pretending not to know about their accountability, denying their responsibility, blaming others for their predicament, citing confusion as a reason for inaction, asking others to tell them what to do, claiming that they can’t do it, or just waiting to see if the situation will miraculously resolve itself. This process, if unabated, can wreak both personal and professional havoc.

As we have seen earlier, individuals, leaders and teams when they demonstrate above the line behavior, they See It, Owe It, Solve It and Do it. These are also known as FOUR steps of accountability.

Why do people fail to see it? People most frequently fail to see reality because they choose to ignore or resist changes in the external environment.

Why do so many people fail to own it? People most often fail to own their circumstances because they cannot bring themselves to accept the accountability side of their story.

Why do people fail to solve it? As people begin solving problems they often encounter obstacles, expected and unexpected, that can stimulate a temptation to fall below the line into the victim cycle.

Why do people fail to do it? Most people who fail to Do It can’t or won’t resist the gravitational pull from Below The Line which can so easily drag someone back into the victim cycle, wasting valuable time, energy, and resources, ignoring and denying, making excuses, developing explanations, pointing fingers, getting confused, and waiting to see if things will get better. In our experience, this happens most often because people naturally resist the perceived risks associated with becoming fully responsible for results. A fear of failure can create a terrible burden that makes taking the final step to accountability virtually impossible.

Now that we have understood the meaning of accountability and concept of below the line and above the line, what shall be done to imbibe accountability as a habit?

Creating accountability in others is a process and doesn’t happen as a result of some singular event. Many leaders mistakenly think that once their people have been exposed to the concept of accountability and understand it, they will never fall below the line again. This “event” approach to accountability, the notion that accountability happens at an identifiable moment, doesn’t work. Leaders who make this mistake tend to use accountability as a hammer, nailing people when they fall below the line in an unending game of “I got you.” Such hammering will only propel people back into the victim cycle. Therefore, you must help people feel empowered by the concept of accountability, not trapped by it.

Therefore, whenever you hear a victim story or a below the line excuse, you shall use the following five key steps to coach that person away from reacting and toward learning:

1. Listening. Look for instances of victim behavior, and when you engage someone in a discussion of their victim story (for the purpose of coaching them) or hear “below the line excuses”, listen sympathetically to what they have to say.

2. Acknowledging. Acknowledge the victim facts and obstacles that someone thinks have kept him or her from getting desired results. Show the person that you understand their feelings and know yourself how hard it is to overcome those feelings. Agree that the challenges are real or that bad things do happen to good people.

3. Asking. If someone seems deeply attached to a victim story, gently move the discussion toward the accountability version of the story. Continually pose the question: “What else can you do to achieve the result you desire or overcome the circumstance that plagues you? What can we control, and what can’t we control in this situation? What are we pretending not to know about our accountability in this situation? What have we learned from our recent experience?

4. Coaching. Use the steps to accountability to help a person identify where he or she currently stands and where the person needs to go to obtain desired results. Emphasize that falling below the line on occasion is only natural but staying there never yields results. Stress how rising above the line will produce positive outcomes.

5. Committing. Commit yourself to helping a person create an above the line action plan and encourage him or her to report on their activities and progress. Don’t end a coaching session without setting a specific time for follow-up, allowing sufficient time, but not too much time, to elapse. If the person does not approach you at the appointed time, take the initiative yourself. During these follow-up sessions, continue to look, listen, acknowledge, ask, coach, and recommit. Provide honestly, caring feedback about progress, and express congratulations for every improvement.

In an ideal world, it wouldn’t be necessary for leaders to coach accountability because everyone would acknowledge their accountability in every situation. However, since this is not an ideal world, and since everyone is fallible, leaders must make coaching a daily habit. And while we have emphasized proactive coaching, which focuses on the present and the future, we have also come to appreciate the need for the review of the past, what we call accounting for progress. When handled properly, an after-the-fact accounting can provide a person with an opportunity to measure progress toward results, learn from previous experience, establish a sense of accomplishment, and determine what else can be done to get the desired results. While most leaders intuitively know the value of urging people to account for their actions, many often fail to do it well.

Ultimately, personal accountability means accepting full responsibility for results. It requires the sort of attitude popularized in the Nike footwear television commercials: “Just Do It.” If you don’t Do It, you’ll never reap the most valuable benefit that is derived from full accountability: overcoming your circumstances and achieving the results you want.

I finished my presentation in a huge round of applause. I shook hands with all participants and exchanged visiting cards.

As I driving back to home, I was trying to analyze the impact of presentation and trying to figure out probable response. Are they happy? Will they engage me? Is there anything I can improve upon? Exactly after TEN days of my presentation, I received a call from the HR Head, Nilesh, asking me to send my commercials as their Executive Team has decided to engage me for a pilot batch of coaching 15 Managers and inculcate accountability in their approach and attitude. Based on the outcome of the pilot batch, they will take a decision to engage me further or not.

I shared my commercial details. They seem to be happy with the results that I have managed to get with the pilot batch. Last month they have extended my contract and have given me another batch of 25 Managers.

Thereby, a small, casual discussion at the airport has been converted into a business opportunity.

To prepare my presentation and coaching assignments, I referred the following -

  1. The Oz Principle: Getting Results through Individual and Organizational Accountability, By – Roger Connors, Tom Smith, Craig Hickman
  2. Change the Culture, Change the Game: The Breakthrough Strategy for Energizing Your Organization and Creating Accountability for Results, By – Roger Connors, Tom Smith
  3. How Did That Happen? Holding People Accountable for Results the Positive, Principled Way, By – Roger Connors, Tom Smith

I will be glad to look forward to your feedback.

(Disclaimer: To abide by my terms and conditions of a contract and following confidentiality clause, I have changed the name of my client, industry and location of work)