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Unformatted text preview: Forensic and Investigative Accounting Forensic Chapter 2 Forensic Accounting Education, Institutions, and Specialties
© 2009 CCH. All Rights Reserved. 4025 W. Peterson Ave. Chicago, IL 60646-6085 1 800 248 3248 www.CCHGroup.com Termites, Rust, and Fraud
Just as termites never sleep, fraud never sleeps. Just like termites, fraud can destroy the foundation of an entity. Chapter 2 Forensic and Investigative Accounting 2 Professors’ Top Ten Topics in Professors’ Forensic Accounting Curricula Forensic
1. 2. 3. 4. 5. Fundamentals of fraud. Financial statement fraud. Types of fraud. Cooking the books and problems in Cooking accounting. accounting. Elements of fraud: pressure, opportunity, and Elements rationalization. rationalization.
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Chapter 2 Forensic and Investigative Accounting 3 Professors’ Top Ten Topics in Professors’ Forensic Accounting Curricula Forensic
Antifraud controls. 2. Internal control evaluation. 3. Theory and methodology of fraud Theory examination. examination. 4. Principles of ethics and corporate code of Principles conduct. conduct. 5. Fraud detection and deterrence programs. Practitioners tend to emphasize litigation service more than professors.
Chapter 2 Forensic and Investigative Accounting 4 Knowledge, Skills and Abilities Knowledge, Needed by Forensic Accountant Needed
Law, legal system, courts, and courtroom Law, procedure. procedure. Financial statement fraud. Corporate governance, shareholder rights and Corporate litigation, securities laws, and protections. litigation, Report writing and communication. Criminal law and procedure. (continued on next slide)
Chapter 2 Forensic and Investigative Accounting 5 Knowledge, Skills and Abilities Knowledge, Needed by Forensic Accountant Needed
Computer fraud and cybercrime. Human factors involved in intelligence Human gathering, interview techniques and understanding the motivations for fraud and other criminal activities. other Ethical issues in business. Business valuation. Chapter 2 Forensic and Investigative Accounting 6 Find It, or I’ll Sue
Accountants must be attuned to detecting Accountants fraud at every level of service, including standard accounting services, compilations, reviews, and bank reconciliations. If there is fraud and you don’t detect it, you are going to be sued, and don’t you you will likely lose, as the public perception is the accountant is the watchdog. accountant
Robert J. DiPasquale, Parsippany, N.J. Robert Source: H.W. Wolosky, “Forensic Accounting to the Forefront,” Practical Accountant, Source: Practical February 2004, pp. 23-28. February
Chapter 2 Forensic and Investigative Accounting 7 Forensic Accounting Knowledge Base Silk, Silk, Silk
Chapter 2 Forensic and Investigative Accounting 8 Careers in Forensic Accounting
Parade magazine on April 15, 2007, indicated that the hottest jobs for college graduates were forensic accountants. were Chapter 2 Forensic and Investigative Accounting 9 Income Expectations for Income Forensic Accountants Forensic
Salaries start around $40,000. Senior-level government employees can Senior-level earn between $85,000 to $95,000. earn In the private sector, one can earn between In $125,000 to $150,000. $125,000 Chapter 2 Forensic and Investigative Accounting 10 Consulting Fees
Forensic accountants work with attorneys, Forensic private investigators, law enforcement officers, corporate security specialists, the IRS, and the FBI. IRS, In 1999, Kessler International stated that the In firm charges about $300 per hour for forensic consultations. forensic Chapter 2 Forensic and Investigative Accounting 11 Background in Forensic Accounting
A forensic accounting background is helpful forensic in these professional specialties: in Accountants SEC accountants Consultants Bankruptcy specialists Internal auditors Professors IRS auditors Bank examiners Government Chief financial officers Government auditors auditors Valuators of closely Valuators FBI agents held businesses held
Chapter 2 Forensic and Investigative Accounting 12 Specialties Within Forensic and Specialties Investigative Accounting Investigative
Employee Crime Specialist Asset Tracing Specialist Litigation Services Specialist and Litigation Expert Witness Expert Chapter 2 Forensic and Investigative Accounting 13 Forensic Groups and Credentials
Group American College of American Forensic Examiners International (ACFEi) International Association of Certified Association Fraud Examiners (ACFE) Fraud Association of Certified Association Fraud Specialists (ACFS) Fraud Credential Certified Forensic Certified Accountant (Cr.FA) Accountant Certified Fraud Examiner Certified (CFE) (CFE) Certified Fraud Specialist Certified (CFS) (CFS) Chapter 2 Forensic and Investigative Accounting 14 Forensic Groups and Credentials
Group Forensic Accounting Forensic Society of North America (FASNA) (FASNA) National Association of National Certified Valuation Analysts (NACVA) Analysts Credential None Certified Valuation Analyst Certified (CVA) (CVA) Certified Forensic Financial Certified Analyst (CFFA) Analyst Certified Fraud Deterrence Certified (CFD) (merged with CFFA in 2007) in
15 Chapter 2 Forensic and Investigative Accounting Professional Groups and Credentials
Group National Litigation Support National Services Association (NLSSA) (NLSSA) Network of Independent Network Forensic Accountants (NIFA) Forensic Institute of Business Institute Appraisers Appraisers American Institute of CPAs
Chapter 2 Credential None None Certified Business Certified Appraiser (CBA) Appraiser Certified Financial Certified Forensics (CFF) Forensics
16 Forensic and Investigative Accounting CPA Certificate Important
AICPA research indicates that CPAs AICPA represent 94 percent of forensic experts hired over two years. hired Source: Field of Forensic Service Remains Hot, A. E. Feldman Blog, Source: http://blog.aefeldman.com/2009/04/13/field-of-forensic -services-rem... http://blog.aefeldman.com/2009/04/13/field-of-forensic Chapter 2 Forensic and Investigative Accounting 17 Difficulties With Fraud
Joseph Wells says Joseph Regrettably, the actual cost of fraud is Regrettably, unknown and unknowable. It is a unknown unknowable It concept the criminologists call “the dark figure.” Unlike visible crimes such as robbery, not all frauds are uncovered. Of those uncovered, not all are reported. No agency is tasked with compiling comprehensive data on fraud.
Source: http://www.nysscpa.org/cpajournal/2006/906/infocus/p16.htm Source:
Chapter 2 Forensic and Investigative Accounting 18 Predication The ACFE group indicates that in the private The sector, a fraud investigation should not be conducted without proper predication. predication Examples: Anonymous tips, complaints, audit Examples: inquires, conflict of interest. inquires, Thus, predication is the basis for undertaking a Thus, predication fraud investigation. fraud Without predication, the target might be able to Without sue for real or imaginary damages. sue Chapter 2 Forensic and Investigative Accounting 19 ...
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