Fraud Chapter 11 Powerpoint

Point estimates are made and confidence point

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Unformatted text preview: vals are used to achieve desired levels of precision. precision. – t-tables and z tables: Used to provide desired -tables precision levels. precision Chapter 11 Forensic and Investigative Accounting 23 Using Regression Analysis for Damages in General Damages Virtually all cases in which liability is found Virtually has a damages phase to the case. has Most scenarios require an analysis of what Most would have happened absent the act that caused the liability. caused – Regression analysis gives an expert a foundation Regression from which to develop and support costs behavior assertions. assertions. – There is a solid analysis approach which describes There the nature of the analysis so the expert can present his/her findings clearly to the jury/judge in order to gain support of the expert’s opinions. Chapter 11 Forensic and Investigative Accounting 24 Regression/Correlation Analysis Regression/Correlation USING REGRESSION/CORRELATION USING ANALYSIS ANALYSIS MULTIPLE REGRESSION – – – More than one independent variable. Most medical research uses multiple regression. Still one “a” value and “r” value. Chapter 11 Forensic and Investigative Accounting 25 Reasons for the Unexpected Some of the accounting reasons that regressions may yield unexpected or perplexing results include: – When and how allocations are made. – The nature of transfer prices in an organization. – Entity concept: what part of the business is involved in the case? – Accounting policies can make a big difference in cost behavior analysis. Forensic accountants must be adequately informed about the nature and operation of the accounting system for each and every business that they are evaluating. Chapter 11 Forensic and Investigative Accounting 26 Federal False Claims Act The Federal False Claims Act was passed to The protect the government from the unscrupulous acts of a few government contractors that intentionally or carelessly overcharge the government for goods or services. government Chapter 11 Forensic and Investigative Accounting 27 Federal False Claims Act Litigation Fraud allegations Whistleblower allegations – Qui tam suits » Origin » Current application » The role of the US Justice Department in Qui Tam The suits – Reasons for bringing action Chapter 11 Forensic and Investigative Accounting 28 Accountant’s Role in Federal False Accountant’s Claims Act Litigation Claims Accountants may act as an expert witness Accountants for the defense, the government, or a whistleblower litigating the qui tam parts of the case. the The dynamics of FFCA cases can be quite The different than typical cases. different Accountants have a unique role to play in Accountants FFCA cases. FFCA Chapter 11 Forensic and Investigative Accounting 29 Accountant’s Role in Federal False Accountant’s Claims Act Litigation Claims Typical questions that accountants help courts to answer Typical are: are: – What costs should be included in the contract? – How should costs be measured under the contract? – What is the correct timing of the costs and/or What revenues under the contract? revenues – What accounting concepts, rules, etc., apply under What this contract? this – What is the magnitude of the damages that occurred What because of the fraud that took place? because Chapter 11 Forensic and Investigative Accounting 30 Accountant’s Role in Federal False Accountant’s Claims Act Litigation Claims Under the Federal False Claims Act, a person Under acts knowingly with respect to information if the knowingly person has: person – Actual knowledge of information. – Acts in deliberate ignorance of the truth or Acts falsity of the information. falsity – Acts in reckless disregard of the truth or Acts falsity of the information. falsity Chapter 11 Forensic and Investigative Accounting 31...
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