15 Sep

The Gumshoe of CPAs: Forensic Accountants Look Beyond the Financials

Business Journal
By Becca Mader

Like many certified public accountants, Tracy Coenen works with numbers, but her focus is on digging into records, asking questions, looking behind the numbers and finding missing links. She is a sleuth — an accounting sleuth, that is.

Coenen is a forensic accountant and a CPA who started her own forensic accounting consulting business, Tracy L. Coenen S.C., in January 2000. Forensic accountants provide expert witness services, damage calculations for contract disputes or lawsuits, audits for insurance fraud or business fraud cases and business valuations.

“I have always been inquisitive,” said Coenen, 29, whose license plate spells “QUESTNS.” “I like to ask a lot of questions. I always have.”

Forensic accountants are like detectives, said Larry Crumbley, editor of the Journal of Forensic Accounting and a KPMG endowed professor in the accounting department at Louisiana State University.

“The regular accountant is like a watchdog,” Crumbley said. “The internal auditor is like a Seeing Eye dog and the forensic accountant is like a bloodhound.”

Forensic accounting includes two subsets: investigative accounting and litigation support.

Investigative accounting involves an accountant searching for fraud, Crumbley said. Litigation support is where an accountant assists attorneys in preparing for civil and criminal trials and, sometimes, testifying.

Coenen works with the insurance and legal industries to calculate losses in insurance policies, investigate insurance fraud, help attorneys calculate economic losses in lawsuits and serve as an expert in litigation.

She credits her investigative skills to her inquisitive nature and criminology background.”I had a knack for it right off, maybe because I’ve always been nosy,” Coenen said.

Coenen’s interest in forensic accounting was sparked while she was enrolled in a white collar crime class for a criminology major at Marquette University, Milwaukee. Coenen became interested in accounting and started taking classes.

After working as a probation officer for the state of Wisconsin from 1994 to 1995, she returned to Marquette to pursue a master’s degree in business administration and took additional accounting classes and became a CPA. After graduating in 1996, she worked for a year at the Milwaukee office of Arthur Andersen L.L.P.

Looking for a way to integrate criminology and accounting, Coenen received information from an executive recruiter about a forensic accountant. Coenen spoke to the forensic accountant and was hired in 1997 at Peters & Associates, Brookfield.

After about three years, Coenen wanted to develop her own business. She recruits most of her clients through networking and her affiliations with Women Business Owners Network, CPA Law Forum and Business Network International.

Northwestern Mutual, Milwaukee, was the only client Coenen said she brought from her previous work at Peters & Associates. Coenen has worked on several disability insurance audits for Tom Mattocks, senior financial consultant for disability income at Northwestern Mutual. “She has good communication skills and has good instincts,” Mattocks said. “She does a thorough job.”

In the past 10 years, he has worked more with forensic accountants than CPAs because of their focus on individual cases.”They have special qualities one needs to do rather unusual work,” Mattocks said.

Although Coenen is prepared to testify in court, her clients’ goal is to settle out of court. Yet Coenen said she likes being in the hot seat and enjoys being the expert witness. “I’m very confident about my work and the quality,” she said. “I’m not going to put out an opinion until I can support it.”

Coenen said she’s on target to beat her earnings estimates for this year, though she didn’t disclose exact revenue.

An inquisitive mind and attention to detail are prerequisites for the field, which is one of the fastest-growing areas within accounting in the past five to seven years, Crumbley said. Sixteen universities in the United States offer classes on forensic accounting and often the subject is taught within a fraud class, Crumbley said. But Coenen said forensic accounting is a hands-on learning process.

At Peters & Associates, Coenen had a chance to work on cases early on, said shareholder John Peters, who described Coenen as lively and excited about her job. “You have to have a certain amount of aptitude for it,” Peters said.

As for her methods, Coenen said she simply looks through the financial documents available and makes assumptions based upon the numbers. The challenge is gathering enough documentation and support for her opinions, whether for insurance claim evaluations or lawsuits.

“I have to check and recheck the numbers,” Coenen said. “The last thing I want is to be nailed on where I got the numbers from.” Objectivity and confidentiality are foundations of forensic accounting, and Coenen likes to find a favorable result for her clients. But the numbers don’t lie.

“I don’t want to be viewed as a hired gun,” Coenen said. “I call it like I see it.”

Tom Mickelson, president of the Wisconsin Institute of Certified Public Accountants, said there are very few forensic accountants in the state.

Coenen sees forensic accounting as having a great potential for growth. “I see a lot of opportunity in the Milwaukee area as more attorneys become aware of experts out there who work with both sides and do it with integrity and accuracy,” Coenen said.

Leave a Reply