Free Essay

Forensic Accountant: Fraud Buster

In: Business and Management

Submitted By Army94SFC
Words 1726
Pages 7
Using Teams in Production and Operations Management:
Forensic Accountants: Fraud Busters.
By:

For:

Class: Bus 508:

Contemporary Business

Date: 13 November 2012

Abstract: A case study for the Strayer University, Woodbridge, VA, Business 508 class, this paper provides for a brief review of 1) The skills that a forensic accountant requires; 2) The role of the forensic accountant in the courtroom; 3) The legal responsibilities of the forensic accountant; and lastly, 4) The role of the forensic accountant in a couple of major accounting fraud scandals.

The world of Accounting has seen several major scandals since the early 1990s. These include major accounting failures such as Enron, WorldCom, Adelphia, Tyco, Phar-Mor, Cendant, Computer Associates, AOL, Freddie Mac, ImClone, Qwest Communications, Royal Ahold, Health South Corporation, AIG, Lehman Brothers, and most recently the Olympus Corporation. Some of these have resulted in the collapse and dissolution of the company – Enron, Adelphia; others have resulted in a major restructuring of the company – AOL, AIG, Freddie Mac. Whatever the result, they have all been caused by accounting fraud – either “cooking the books” to hide major losses or to hide the theft of funds. It has also resulted in the failure and absorption of the one of the Big Five Accounting firms – Arthur Anderson. Besides the whistle blower who brought most of these to public view and the lawyers who have been involved their dismantling one of the other major role players, though unsung and unknown, has been the Forensic Accountant. We will be taking a look at this last individual or groups of individuals in most cases. We will look at what they do, their “required” skills and role in courtroom and possibly examine their role in a couple of the noted scandals.
The Forensic Account
What is a forensic accountant? Bolgna and Linquist (1995) defined forensic accounting as the application of financial skills and an investigative mentality to unresolved issues, conducted within the context of the rules of evidence. In 2011, a definition in Accountancy Ireland, noted: “Forensic accounting has been defined as "the science of gathering and presenting financial information in a form that will be accepted by a court of jurisprudence against perpetrators of economic crimes". The field integrates accounting, auditing and investigative competences to detect and prevent financial irregularities in business. (Idowa, 2011). As the field grows, this definition and information will continue to evolve.
But what are the skills that the Forensic Account requires? d’Ath (2008) notes them as including the following: 1) Thoroughness, 2) Curiosity, 3) Creativity, 4) Credibility, 5) Being articulate, 6) Awareness of laws and regulations. Others include things such as: a disbelief that the numbers as presented are correct – almost an inherent belief that they are hiding something. As noted by Crumbley and Apostolou (2005), Robert Roche describes a forensic accountant as someone “who can look behind the façade—not accept the records at their face value—someone who has a suspicious mind that [considers that] the documents he or she is looking at may not be what they purport to be and someone who has the expertise to go out and conduct very detailed interviews of individuals to develop the truth, especially if some are presumed to be lying.” Forensic accounting often involves an exhaustive, detailed effort to penetrate concealment tactics. Not really a very trusting fellow.
But what does a forensic account need to know? Well in the United States, he or she should be well versed in accounting, possibly even a CPA; have some legal training, especially in the various privacy laws: Fair Credit Reporting Act (FCRA), Health Insurance Portability and Accountability Act (HIPAA), the Privacy Act of 1974, the Family Educational Rights to Privacy Act (FERPA), and the Electronic Communications Privacy Act (ECPA). He or she should also have a background in computer sciences with knowledge of Advance Information Systems (AIS). The need to examine not only paper files but also computer files and communications all require background in the noted areas. There are certifications available for the forensic accountant. They are the CrFA – Certified Forensic Accountant and the CFAP – Certified Forensic Accounting Professional. What does the legal side of this profession look like?
The Forensic Account in the Courtroom and in your Business
They also need to be above reproach in their knowledge and ethics as they may be called to testify as an expert witness in court cases. They must be able to talk about and explain complex financial data and calculations to a judge or a group of individuals “off the street” who have no knowledge or background in most of the noted fields. Per Curtis (2005), as far as lawyers are concerned forensic accounting is the application of accounting tasks for an evidentiary purpose.
It has been defined with greater precision as ‘‘the action of identifying, recording, settling, extracting, sorting, reporting, and verifying past financial data or other accounting activities for settling current or prospective legal disputes or using such past financial data for projecting future financial data to settle legal disputes.’’ Forensic accountants are essential to the legal system, providing expert services such as net worth valuations in divorce proceedings; asset valuations in bankruptcy matters; financial statement analysis in securities and tax cases; and the analysis of financial documents in fraud schemes. The data that the forensic accountant collects must be admissible in a court of law hence to the need for the knowledge of privacy laws and legal training. All the evidence in the world will do the prosecutor no good if they can’t present it. The forensic accountant must also come off a personable, knowledge individual without seeming to talk down to the court and jury.
While in a business, the forensic accountant needs to understand, that without a court granted subpoena, that his or her right to access computer information, question people or rummage through files may limited by law to that access granted by the owner or directors/CEO of the business or his/her direct representative and that even this access may be limited by the privacy laws noted above. Everything must be documented, copies made and originals secured --- all those things that you do in a normal criminal case.

Enron and Adelphia and the Role of the Forensic Accountant
At this point we will take a quick look at the role of the forensic accountant in two of the accounting scandals from since the year 2000 – Enron and Adelphia. Enron was an energy company that cooked its books to make it profits and balance sheet look better than it was. Basically Enron formed special purpose entities (SPEs) to help it obtain off-the-balance sheet financing. At that time this was a normal and legal activity. Enron however used them to move moves money and stock to and fro, to build up account and notes receivable, to inflate service revenue and to hide excess payment to some of its officers. Adelphia was a telecommunications company that provided phone, cable and internet services. Adelphia was initially a family owned business that went public. Unfortunately for the company and its employees, the owners, the Rigas, used it for a personal bank account. They had the personal “servants” – chefs, maintenance personnel, drivers listed as company employees. They made “loans” to themselves from the company to buy gold courses, jets, field naming rights, mansions, etc. and then tried to hide to loans on the books of various subsidiaries.
In Enron’s case, the problems were exposed by a senior accounting official in a memo to the board. Adelphia’s fall came when a financial reporter asked a question at the end of a quarterly report call concerning some off-the-books loans on the subsidiaries books. In both cases, when the collapse was complete or nearly so, a team of forensic accountants as brought in to identify all the issues, identify lost money, who was responsible and how it happened. For each group it required the examination of accounting records – paper and computer; the records and minutes of directors, CEO and CFO meetings; the documentation approved by the board of directors, CEO and CFO concerning separation of duties, due diligence requirements, tracking of purchase requests, approvals and payments, etc. Basically they had to rebuild and trace all the major functions and activities of the Board, the CEO, CFO, the SPEs and subsidiaries; trace the movement of money, property, stock and personnel, and in the case Enron, the possible manipulation of the energy market to support its needs. All in all they forensic accounts had their work cut out for them.
Conclusion
So from a humble and almost unidentified start a couple of thousand years ago to the first time the term forensic accountant was used in 1946 to now, 2012, the forensic accountant has undergone quite a bit of change and growth. Given the passage of Sarbanes-Oxley and greed of people, the need for forensic accountants will grow. The ability to identify and track illegal accounting activity has grown to be a major financial function in today’s world – one for which we are all paying.

Citations
Apostolou, N. G., & Crumbley, L. (2005). The Expanding Role of the Forensic Accountant. Forensic Examiner, 14(3), 39-43.
Bolgna, J. G., & Linquist, R. J. (1995). Fraud auditing and forensic accounting. New York: Wiley.
Curtis, G. E. (2008). Legal and Regulatory Environments and Ethics: Essential Components of a Fraud and Forensic Accounting Curriculum. Issues in Accounting Education, 23(4), 535-543. d’Ath, J. (2008). Forensic accounting is here to stay. Chartered Accountants Journal, 87(3), 12-14.
Idowu, S. (2011). SO YOU WANT TO BE A FORENSIC ACCOUNTANT?. Accountancy Ireland, 43 (6), 65-66,

Five Guys Burgers and Fries (2012, October 23). About Us. Retrieved from Five Guys Burger and Fries: Http://www.fiveguys.com/about-us.aspx

Five Guys Burgers and Fries (2012, October 23). About Us. Retrieved from Five Guys Burger and Fries: Http://www.fiveguys.com/about-us/faq.asp

Joiner, L. (2012, July 20; updated 2012, August 2). Five Guys found simple recipe for success: Do it right. Retrieved from USA Today, Money: http://usatoday30.usatoday.com/money/economy/story/2012-07-29/five-guys-ceo-jerry-murrell/56541886/1

Murrell, J. (2012, October 23). 5 Reason Why Five Guys is a Big Success. Retrieved from Inc.: http://www.inc.com/ss/five-guys-burgers-and-fries#3…...

Similar Documents

Premium Essay

Forensic Accountant

...Running head: Forensic accountant 1 Forensic Accountant Tanya Pace Dr. Gina Zaffino Bus 508, Contemporary Business 11/16/2012 Running head: Forensic Accountant 2 Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. Although forensic accounting is not a new field, it has become more talked about since cases like Enron came to light. For someone interested in the Forensic Accountant profession they should know that this field can be time consuming, but very rewarding. People who work in this career investigate white collar crimes such as company fraud, fraudulent financial record reporting, and illegal investment schemes. In a recent study by the Federal Bureau of Investigation shows that white collar crimes have cost the United States and estimated 300 billion dollars (DiGabriele 2008). I think five of the skills that a forensic account would need are communication skills, detail oriented, professional and ethical behavior, sound judgment and discretion. Communication skills are vital in any profession. It allows you to convey information for others to receive. The problem with communication is that it can be interpreted differently by other intended parties. As a forensic accountant, communication skills, verbal and non verbal, are......

Words: 1643 - Pages: 7

Premium Essay

Forensic Accountants

... Forensic accounting is often involved with accounting, analyzing financial evidence, auditing, and investigating legal and financial proceedings. This paper will examine the most important five skills that a forensic accountant needs to possess and evaluate the need for each skill, describe the role of a forensic accountant within a courtroom, analyze the legal responsibility of a forensic accountant has while providing service to a business, and research two cases where forensic accountants have provided vital evidence in a case. Caleb Newquist touches on the subject of new forensic accountants, “Prospective forensic accountants can count on making many enemies in the course of their work and must be unhinged by the retaliation that normally follows uncovering fraud and other misconduct” (p.1). Their job description comprises of a wide range of duties in which each case they work require different skills and different ideas to become successful. Question 1: Determine the most important five skills that a forensic accountant needs to possess and evaluate the need for each skill The most important five skills that a forensic accountant needs to possess are analytical, creativity, organization or detailed oriented, persistence, and investigative skills. According to Luanne Kelchner editor for eHow, “Forensic accountants must have an analytical personality to perform well in the job. According to the American Institute of CPAs, a group of lawyers, CPAs and forensic......

Words: 1134 - Pages: 5

Premium Essay

Forensic Accountants

...Forensic Elite: Detective of Numbers Tara Albright Strayer University BUS 504 Contemporary Business February 24, 2013 Dr. Jason M. Barrett Forensic Elite: Detective of Numbers No one in the world likes a snitch. In the early 2000’s the urban campaign “Stop Snitching or Die” changed the face of whistle blowing in the United States (Masten, 2009). Neighborhood violence during the “Stop Snitching or Die” campaign increased as law abiding citizen cowered inside their homes as gun shots rang out feet away from their doorsteps (Masten, 2009). In corporate America companies faced huge financial lost as the “Stop Snitching or Die” theology spilled into boardrooms and accounting departments. The corporate world was not as brazen as the urban world killing anyone that help out law enforcement, but the results of company leaders keeping quiet about misconduct slowly murdered the American economic system. While corporate leaders played their hand at boardroom gangbanging by lying, stealing, and falsifying financial documents, the world would see snitching taken to a new level (Masten, 2009). The job of combing through those illegal financial documents would go to an elite set of men and women, called forensic accountant. Forensic accountants help America recover huge amounts of financial dollars by bring corporate leaders to justice who made illegal business decisions (Davis, Farrell, & Ogilby, 2009). Attributes of the Elite Forensic accounting/accountant (FA)......

Words: 2344 - Pages: 10

Premium Essay

Fraud and Forensic Accounting

...------------------------------------------------- Fraud and forensic accounting in small business’ Tasha S. Barnes ------------------------------------------------- Fraud and forensic accounting in small business’ Tasha S. Barnes Accounting fraud is serious issues for all businesses, but they are especially challenging for small companies that are “cash strapped”. Fraud undermine decision making, lead to financial losses and, in some cases, even force companies to lay off staff or shut their doors. Fraud is a common problem for small businesses. According to the Association of Certified Fraud Examiners (ACFE), 30 percent of all fraud occurs in small companies. That is a disturbing fact considering that the estimated fraud loses for business of all sizes was nearly $2.9 trillion in 2009. Fraud occurs so frequently in small business for a couple of reasons. A common reason is that small companies typically have small or even single-person accounting staffs and limited internal controls; lack of separation of duty. It is typical to have the accountant also be the office manager and receiving clerk. Problems can arise if for no other reason than on one double checks the work. Besides being more susceptible to errors and fraud, small businesses also are less likely to discover them because financial audits are almost never performed. It seems, as though a new scam comes to light every day, with electronic-media inspired frauds such as phishing and spoofing,......

Words: 1750 - Pages: 7

Premium Essay

Forensic Accountant

... 05/19/2013 forensic accountant CONTEMPORARY BUSINESS forensic accountant CONTEMPORARY BUSINESS 125/19/20135/19/20135/19/2013 fraud busters In today’s world, it is knows by everyone that different developments were taken place in the last periods. Our globalized world in a state of continuous technological change and innovations has been challenged by new generation criminology risk factors. From business, government, regulatory authorities, and the courts evidence indicates that a higher level of expertise is necessary to analyze current financial transactions and events. Forensic accounting is a specialized area of an accounting practice that describes engagements which results from actual or anticipated disputes or litigations. Forensic accounting has been defined as accounting analyzers that can uncover possible fraud that is suitable for presentation in court. A Forensic accountant needs accounting, law, finance, investigative and research skills to identify and prevent fraud. Forensic accountant uses her/his knowledge of accounting, law, and criminology to uncover fraud, as well as gather any evidence and present it to the court. Forensic accountants have been around for nearly 200 years! The earliest reference was found in 1824 in an accountants advertising circular in Glasgow, Scotland.......

Words: 2300 - Pages: 10

Premium Essay

Fraud Busters

...INDIVIDUAL PROJECT: Forensic Accountants: Fraud Busters 1 Individual Project: Forensic Accountants: Fraud Busters Pamela Turner Professor Ann Nelson Contemporary Business 508 February 13, 2013 Strayer University INDIVIDUAL PROJECT: Forensic Accountants: Fraud Busters 2 Individual Project: Forensic Accountants: Fraud Busters Determine the most important five skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. The age of information technology there is a definite rise in computer crimes, financial frauds, employee thefts and securities scams, insurance and bank frauds. The forensic accountant searches out fraud and criminal transactions in banking, corporate entity or from any other financial records within an organization. Forensic accountants take a more proactive, skeptical approach in examining books of accounting. The base of a forensic accountant is accounting knowledge. The dispersement of the knowledge of auditing, internal controls, risk assessment and fraud detection. There must be a basic or general understanding of the legal environment. The legal environment is essential in order to support the litigation. A strong set of communication skills both oral and written (Houck, 2006). Forensic accountant is......

Words: 2306 - Pages: 10

Premium Essay

Forensic Accounting in Practice

...Forensic Accounting in Practice: Forensic Accountants: Fraud Busters A forensic accountant is part investigator, part auditor, part attorney, and part accountant (Levanti, T.). Due to the increase in high-profile cases of companies and individuals, forensic accounting is a growing and popular field in the business and forensic subjects. A forensic accountant is someone who is often retained to analyze, interpret, summarize, interviews and present complex financial and business related issues in a manner that is both understandable and properly supported (Zysman, A.). Forensic accountants usually work in a public practice or are employed by insurance companies, banks, police or government agencies. They are to investigate and analyze any financial evidence, communicate their findings in reports or documents and assist in legal proceedings, such as testifying in court as an expert witness (Zysman, A.). Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. I think the five most important skills that a forensic accountant needs to posses are to be: (1) analytical, (2) detail-oriented, (3) ethical, (4) responsive, and (5) insightful (Davis, Farrell & Ogilby). Analytical The need to be analytical in a forensic accounting engagement may be the most important overall characteristic,......

Words: 1767 - Pages: 8

Premium Essay

The Language and Culture of the Accountant, Auditor and Forensic Accountant

...The Language and Culture of the Accountant, Auditor and Forensic Accountant Jerry Brockman Davenport University Abstract The overall purpose of this Professional Language and Culture report is to detail the accountant’s communication style and culture, as well as, their specialized language. The report begins with a brief discussion of the origin of accounting, as well as, the distinction between bookkeeping and accounting. Additionally, an examination of the Financial Accounting Standards Board (FASB) provides insight into the culture, ethical values and professional standards of accountants. Other areas of discussion in this report are the voice and tone used in various forms of communication by the accountant. Also, included in this report is an excerpt from an interview of an accounting professional as well as an example from a journal article. These artifacts will provide the reader with examples of the mind-set and communication style of the accountant. Finally, this report concludes with an examination of the auditor’s as well as the forensic accountant’s culture and communication style. Table of Contents Contents Abstract 2 Table of Contents 3 Accounting has been around for centuries.. 4 Professional Standards and Ethics 4 Culture of Professional Standards 5 Language of Business 6 Voice and Tone 6 Specialized Areas of Accounting 7 Communication 8 Forensic Accounting 8 Communication 9 Conclusion 9 References 11 Appendix......

Words: 3164 - Pages: 13

Premium Essay

Forensic Accountant Career

...Running Head: Forensic Accountant 1 The Forensic Accountant Career Bus-508 Contemporary Business Professor Chris Lin Sarah Reid August 12, 2012 Forensic Accountant 2 1. Determine the most important five skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. A document for the Skills needed for Forensic Accounting (2012) suggests that Forensic Accountant needs to possess is computer skills, “since document and financial statements have taken a more electronic format, forensic accountants must demonstrate computer skills in finding the paper trials left behind by corporate criminals. A forensic scientist will use computer software, known in their profession as computer-aided tools and techniques CATT to detect white –collar crimes. Some software includes data extraction, spreadsheet and data mining analysis.” According to forensic Accounting (2012) suggests that Forensic Accountant’s investigative skills involve collecting and analyzing the audited information for possible discrepancies. The investigations delve into both missed by ordinary accounting and auditing methods. A forensic......

Words: 2009 - Pages: 9

Premium Essay

Forensic Accountant

...Forensic Accountants: Fraud Busters Strayer University Business 508 August 11, 2013 Abstract The paper will determine the five important skills a forensic accountant must possess and describe their role within a courtroom environment. It will also analyze the legal responsibility of the accountant while serving its clients business. Giving two examples where a forensic accountant played an important role in aiding attorneys in presenting fraudulent bookkeeping records of company’s who ultimately committed white-collar crimes. Have you ever heard the figure of speech a “needle in a haystack” when referring to finding a small object in a large setting? The task of performing a very detailed search seems impossible. Leaving no stone unturned and demanding hours and hours of mental and manual labor. This is what a forensic accountant faces. By definition, a forensic investigation of any kind is conducted with the purpose of obtaining evidence that will be used in a court case. Forensic accounting is simply the analysis of financial documents use as tax returns, bank statements, canceled checks and the like, in search of proof of a criminal act, be it tax evasion, running numbers, embezzlement, money laundering, fraud by wire or securities fraud (DiGabriele, 2009). These crimes exists for the sole purpose of illegally making money. Leaving a paper trail pointing to criminal activity producing money coming into and leaving the......

Words: 2760 - Pages: 12

Free Essay

Forensic Accountant

...Introduction There are many key component of a case. Some of these things include the evidence, the witnesses and the expert witnesses. One of these expert witnesses includes the forensic accountant, which has become a common use within the courtroom. This paper will discuss the five most important skills that a forensic accountant needs to possess, the role of a forensic accountant within a courtroom environment, the legal responsibility a forensic accountant has while providing service to a business, and two cases where forensic accountant have provided vital evidence in a case. It will also summarize the accountant’s role during the cases. Five Most Important Skills The five most important skills a forensic accountant needs to possess are private investigator, research skills, analytical abilities, accounting and task manager. Private investigator skills are important because they have to be able to gather information about the case. They have to be able to provide hard facts about the case to prove that fraud is actually accruing within the company or towards the company. They also have to go undetected that way important things that can help a case will not be cover up nor erased. They also have to possess research skills. This way they can gather only the important facts that can help with the case because they do not want to enter evidence that can harm the case or that does not have any relevance to the case. Analytical abilities are essential......

Words: 793 - Pages: 4

Premium Essay

Forensic Accountants

...Introduction Forensic accounting has been around for many years. With the spotlight on accounting due to high profile scandals such as the Enron debacle, the market for forensic accountants has increased. The increase in white collar crimes due to the economic downturn also has forensic accounting in high demand. These accountants assist in investigating financial, auditing and business related issues and require specialized training. Forensic accountants are retained by lawyers, police forces, insurance companies, banks, and the business community. Government agencies employ forensic accountants as well. Accounting positions at the FBI date back to the 1970s and around 15 percent of today’s agents qualify as special agent accountants. These agents investigate terrorists, spies, and criminals of all kinds who are involved in financial wrongdoing (FBI.gov, 2012). Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. Forensic accounting is a specialty field within the broader area of accounting. These accountants are more than just number crunchers. The realm of forensic accounting requires a certain type of person who possesses specific skills and traits. Besides the core knowledge and skills of any Certified Public Accountant (CPA), they must know how to use a variety of......

Words: 1779 - Pages: 8

Free Essay

Today’s Risk of Fraud: Forensic Accountants Help Protect Identity Theft

...Today’s Risk of Fraud: Forensic Accountants Help Protect Identity Theft Megan Laughman Financial Accounting Theory Michael Miller 4/7/15 Abstract The purpose of this study is to explore the recent cyber breaches that have occurred within companies throughout the United States and to look at the different ways these cyber breaches could have been prevented. The research also examines the need for forensic accountants within the business field, as they are able to help protect a company’s credibility and reputation. The study looks at the different internal controls a forensic accountant can incorporate into a company to help prevent cyber breaches and fraud from taking place. The results of the research provide confirmation that forensic accountants are essential in every company in order to help prevent and detour cyber breaches and fraud. Table of Contents Introduction……………………………………………………………………………………4 Literature Review………………………………………………………………………………7 Data Analysis........................................................................................................................…...14 Results and Conclusion…………………………………………………………………………17 References………………………………………………………………………………………19 Today’s Risk of Fraud: Forensic Accountants Help Protect Identity Theft Introduction Technology today is more advanced than it ever has been and almost everyone this day and age owns a computer, tablet, or smart phone. Most Americans utilize their computers,......

Words: 4916 - Pages: 20

Premium Essay

A Growing Profession Forensic Accountants

...crimes and business fraud, forensic accountants are in great demand. Forensic accounting is the practice of utilizing accounting, investigative, organizational, analytical and communicational skills to conduct examination into a company’s financial statements in legal matters (Crumbley, 2007). Forensic accountants can own their own accounting firms or be employed by lawyers, insurance companies, banks, or large corporations. The use of accountants has played an important role in assisting the government as well as the public. Forensic Accountants participate in detecting scandals and financial crimes caused by individuals, companies and organized crime networks. This profession consists of three main areas litigation support, investigation and dispute resolution (Harris, 200). Litigation support involves the factual arrangement of financial issues, investigation comes in when criminal matters have occurred, and the dispute resolution is the process of bringing justice and fairness. To work effectively within these three core components, forensic accounts must have a set of skills to perform their job efficiently. Important Skills Forensic Accountants must posses more than the fundamental knowledge of financial accounting and auditing. Each project requires analysis, interpretation, summarization and presentation of complex financial- and business-related issues (Matson, 2012). There are several core skills that are required and expected for the accountant to perform......

Words: 2124 - Pages: 9

Premium Essay

Fraud and Forensic Accounting

...Fraud and Forensic Accounting Forensic Services → are directed to delivering solutions to clients for issues where there is disagreement about facts, or where business-related behavior is not in accordance with expectations or standards. → Forensic means "suitable for use in a court of law" Forensic Accountants →  are experienced auditors, accountants, and investigators of legal and financial documents that are hired to look into possible suspicions of fraudulent activity within a company; or are hired by a company who may just want to prevent fraudulent activities from occurring. HISTORY OF FORENSIC SERVICES • Northern Hemisphere (North America and UK) evolved during late eighties and early nineties. • Australia evolved only during 1998. Before 1998, forensic services were provided by accounting practitioners on an ad hoc basis. TYPES OF FORENSIC SERVICES *Note: Forensic Services have been reactive rather than proactive. • Reactive → Tending to be responsive or to react to a stimulus. • Proactive → Acting in advance to deal with an expected difficulty; anticipatory DISAGREEMENT OVER FACTS – REACTIVE SERVICES o Expert Witness Services → Forensic accountant’s role may be in the capacity of the expert witness. → Expert witness will produce a report that will be filed in court and upon which they will give evidence and be cross-examined. o Valuation Services → Determines the...

Words: 1053 - Pages: 5