Forensic Accounting

2008

Developing Expertise in Forensic Accounting to Help Investigate and Prosecute bribery

CURRENT: In the wake of scandals that had taken place in the corporate and public sectors, there has been an increasing interest in the field of forensic accounting – an important tool that will assist investigators not only to prosecute crimes such as bribery but also other criminal wrongdoings such as fraud, money laundering and other white collar crimes. Investigators have to be equipped with this additional knowledge as part and parcel of the investigative tools that the investigators had been trained for.

This paper sets out the area of forensic accounting and based on the experience of the Anti-Corruption Agency of Malaysia, a model for the training of the investigating officers in the area of forensic accounting will be discussed. It is hopeful that the exposure in forensic accounting will help and contribute effectively towards the successful investigation and prosecution of the insidious crime of bribery and other forms of corrupt and illegal acts. (Read more...)

Financial Detectives: The Rising Demand for Forensic Accountants

JANUARY 2008: Like ripples from a pebble pitched into a pond, the federal law passed to combat white-collar crime is -- six years later -- prompting business colleges to beef up their forensic accounting curricula.

"Forensic accounting always involves an investigation, and the mission is to answer a question: was employee or management fraud committed? What are the economic damages resulting from a fire? How much was embezzled? What happened in this contract dispute? And often, you then testify in court about the answers," explained Joe Epps, a Scottsdale, Arizona, certified public accountant who specializes in forensics. (Read more...)

2007

A forensic approach

MAY 2007: A forensic accountant's forte is taking a really thorny problem and pruning it away until an answer remains. This has traditionally been the province of paper, calculators, and more recently, spreadsheets. But today's cases almost always involve some sort of digital information-gathering exercise.

So, when a law firm needs to call on specialist forensic accountant advisers who have their own technology division, when is the best time to do that and what needs to happen on both sides to get the best out of the work. (Read more...)

Thinking Outside the Accountant’s Box

MAY 2007: Traditional accountants tend to think in debits and credits, relying on the basic double entry bookkeeping system that has been around for years. They are accustomed to disbursement journals, payroll registers, and general ledger entries, and can prepare a trial balance, which ultimately provides the basis of financial statements. When reporting on a company’s performance, traditional accountants work with the hard, salient facts found in the financial statements to develop a “report card” on the company’s financial performance. This report card, and the financial systems that support it, encompass the contents of what I call the Accountant’s Box.

Forensic accountants, on the other hand, are trained to think outside the Accountant’s Box. (Read more...)

MARCH 2007: Solicitors and counsel are well aware of the role of forensic accountants in relation to civil cases, including matrimonial, personal injury and commercial claims. But over recent years there has been an upsurge in the use of forensic accountants' expertise in relation to crime and proceeds of crime. David Winch of Accounting Evidence Ltd explores the potential benefits and costs of using one in relation to criminal trials and confiscation proceedings. (Read more...)

MARCH 2007: Gordon Brown, in a recent speech to a Chatam House think-tank on ‘Meeting the terrorist challenge’, described how accountants’ expertise was vital to supporting the work of police, security and intelligence services. ‘What the use of fingerprints was to the 19th century , and DNA analysis was to the 20th century, so financial information and forensic accounting has come to be one of today’s most powerful investigative and intelligence tools available in the fight against crime and terrorism.’ (Read more...)

2006

Forensic Futurama

DECEMBER 2006: Most people think of forensic accountancy in relation to fraud investigations. And there is no doubt that fraud has been the mainstay of many departments over the years.

But the scope of forensic work has expanded and will continue to do so. In litigation, the role of the adviser or expert witness is well defined and is applied in many areas where evaluation of quantum – how much a case is worth – is the key. Forensic accounting also covers areas such as business interruption, product liability, intellectual property, breach of warranty and shareholder/partnership disputes. (Read more...)

Forensic Accounting as an Investigative Tool

Developing a Model Curriculum for Fraud and Forensic Accounting

AUGUST 2006 - As the complexity and scope of commerce has expanded throughout the world, the need to track money and financial information has grown. There has been a corresponding increase in illegal financial activity, according to separate surveys by the U.S. Department of Justice, Pricewaterhouse-Coopers, and the Association of Certified Fraud Examiners (ACFE). Ironically, illegal businesses and perpetrators of financial crimes also need to keep track of their cash flow and manage their operational performance to generate profits, fund activities, and avoid detection, prosecution, and seizure of their assets. (Read more...)

2005

Forensic accounting: A new twist on bean counting

Traditional accountants and auditors have long been referred to as “bean counters.” Some may take offense at the phrase, but if they’re being honest, they admit that it is a simplistic but accurate representation of the work they do.

Your average, everyday accountants and auditors are generally engaged to count the beans. They take a look at the numbers, make sure they all add up, and possibly issue a report saying how and why the numbers add up.

There are different kinds of beans, just like the various industries that accountants may come across. Counting different types of beans may require different techniques and rules.

Accountants are good at reporting their findings after they count the beans. But what if the beans are missing? Or what if the beans are there, but are so mixed up that they make no sense?

Would a “regular” accountant know how to find the beans? Could she or he sort the beans in a way that makes sense to non-accountants? The average accountant has never had to find or sort beans before, so who knows if she or he can find the beans? (Read more...)

The Growing Field Of Forensic Accounting

Sherlock Holmes is probably the most famous forensic practitioner, being a forensic chemist. Another famous practitioner of forensic science was Quincy, a television pathologist who used autopsies and pathology to find murder clues. A future television series may feature a forensic accountant as discussed in the Dallas Times Herald: "Accounting + Intrigue = Lenny Cramer."

Many people consider accountants to be dull bean counters without many original ideas. After all, everyone knows that bean counters are bespectacled, pale-skinned wretches who spend mind-numbing lives in dreary cubicles poring over faint computer printouts and dusty ledgers. Within recent years, a bolder accountant has evolved with a suspicious mind. This forensic accountant looks behind the facade and does not accept information at its face value. Some accounting firms have built entire practices around forensic accounting. Executive recruiter Robert Half International reports increased client requests for CPAs with fraud examining skills and FBI experience. (Read more...)

2004

Insurance Claims — The Role of Forensic Accountants

It has long been recognized that accountants experienced in insurance matters have a role to play with the assessment of many insurance claims. For example, the accountant is often asked to review business interruption or loss of income claims, consider the accounting records supporting property losses, or review financial circumstances in suspected arson cases. Insurance claims involving fraud (either in the form of a fidelity claim or the suspicion that a claim as filed may be fraudulent) add further dimensions to the skills that an accountant requires to be of use to the claims examiner or lawyer. (Read more...)

Prior 2004

The majority of instructing solicitors provide excellent instructions but every now and again we the impression that a solicitor thinks we have X-ray vision. In such cases, it is assumed that, if an accountant stares really hard at a set of accounts, then somehow, magically, information will appear before his/her eyes that is invisible to lesser mortals. (Read more...)

A growing concern - forensic accounting

JULY 2001: This article provides an overview of investigative and forensic accounting to facilitate a common understanding of this area of specialization; further research and discussion; and the identification of opportunities for growth in forensic accounting practices. (Read more...)