The general stereotype of accountants is a quiet demeanor, a sharp wit and an unassuming presence; they take their job seriously and find satisfaction in the details. All these qualities also make for great white collar criminals.
Most accountants are not criminals, but some of the most famous white collar crimes used accounting as a tool to defraud investors, cushion personal bank accounts and avoid taxes.
What is white collar crime?
The FBI defines white collar offenses as actions that deceive, conceal or violate the trust of businesses, investors or government officials. The intentions behind these crimes is often financial − to obtain or avoid losing money, property or services to secure advantages.
White collar crimes are unique because they don’t physically harm victims. The ramifications often lead to emotional or financial damages to investors, employees or consumers. Examples of these crimes are:
- Corporate fraud
- Money laundering
- Securities/commodities fraud
- Tax evasion
How the internet helps
The internet is making fraud schemes more sophisticated, and accountants have more access than ever to records, software and other resources to understand a company’s financial situation. Such access makes it easy for accountants to embezzle funds or modify account records on behalf of companies.
Can accountants help capture white collar criminals?
White collar crime can be hard to spot from the outside. The FBI needs to be creative about tracking down criminals and reducing the harm already done by white collar crime. Investigators work closely with law enforcement and regulatory agencies to target possible crimes, but it is typically auditors, whistleblowers and forensic accountants who catch crimes early on.
Forensic accountants use their accounting skills to investigate fraud and embezzlement and to analyze financial information for legal use. Former FBI professionals claim forensic accountants often find evidence of fraud long before anyone else. To officials, accountants are the first line of defense to white collar crime by reporting and stopping crimes in their tracks.
This dynamic makes accountants like people with super powers; they can either use their powers to catch the “bad guys” or for personal gain. It’s up to them to decide how to use those financial talents.