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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
A practical, hands-on guide to forensic accounting
Careers in forensic accounting are hot-US News & World Report recently designated forensic accounting as one of the eight most secure career tracks in America., Forensic accountants work in most major accounting firms and demand for their services is growing with then increasing need for investigations of mergers and acquisitions, tax inquiries, and economic crime. In addition, forensic accountants perform specialized audits, and assist in all kinds of civil litigation, and are often involved in terrorist investigations. Forensic Accounting For Dummies will track to a course and explain the concepts and methods of forensic accounting.
- Covers everything a forensic accountant may face, from investigations of mergers and acquisitions to tax inquiries to economic crime
- What to do if you find or suspect financial fraud in your own organization
- Determining what is fraud and how to investigate
Whether you're a student pursuing a career in forensic accounting or just want to understand how to detect and deal with financial fraud, Forensic Accounting For Dummies has you covered.
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Seitenzahl: 660
Veröffentlichungsjahr: 2011
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Forensic Accounting For Dummies®
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Table of Contents
Forensic Accounting For Dummies®
by Frimette Kass-Shraibman and Vijay S. Sampath
Forensic Accounting For Dummies®
Published byWiley Publishing, Inc.111 River St.Hoboken, NJ 07030-5774www.wiley.com
Copyright © 2011 by Wiley Publishing, Inc., Indianapolis, Indiana
Published simultaneously in Canada
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.
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Limit of Liability/Disclaimer of Warranty: The contents of this work are intended to further general scientific research, understanding, and discussion only and are not intended and should not be relied upon as recommending or promoting a specific method, diagnosis, or treatment by physicians for any particular patient. The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation any implied warranties of fitness for a particular purpose. In view of ongoing research, equipment modifications, changes in governmental regulations, and the constant flow of information relating to the use of medicines, equipment, and devices, the reader is urged to review and evaluate the information provided in the package insert or instructions for each medicine, equipment, or device for, among other things, any changes in the instructions or indication of usage and for added warnings and precautions. Readers should consult with a specialist where appropriate. The fact that an organization or Website is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Website may provide or recommendations it may make. Further, readers should be aware that Internet Websites listed in this work may have changed or disappeared between when this work was written and when it is read. No warranty may be created or extended by any promotional statements for this work. Neither the publisher nor the author shall be liable for any damages arising herefrom.
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Library of Congress Control Number: 2010943056
ISBN: 978-0-470-88928-2
Manufactured in the United States of America
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About the Authors
Frimette Kass-Shraibman, PhD, CPA, is an associate professor of accounting at Brooklyn College-CUNY. She is also the editor of the Journal of the CPA Practitioner, a publication of the National Conference of CPA Practitioners News and Views. She is also a member of their Board of Directors. She spent over 20 years in public practice accounting where she practiced tax, audit, and forensics. She is formerly director of education for the Foundation for Accounting Education and a professional development manager at the American Institute of Certified Public Accountants. She has been awarded several medals for national tai chi competition. She is a life-long resident of Brooklyn, New York.
Vijay S. Sampath, CPA, CFE, MBA, is a managing director in the forensic accounting and litigation consulting practice at FTI Consulting Inc. He has more than 22 years of experience providing forensic accounting, litigation consulting, financial statement auditing, and business consulting services. He specializes in complex financial investigations involving generally accepted accounting principles and generally accepted auditing standards matters. Vijay also manages Foreign Corrupt Practices Act investigations, post-closing purchase price disputes, and other litigation matters involving white collar crime, bankruptcy, and contract proceedings. He is an adjunct professor at the Rutgers Business School, where he teaches financial accounting courses.
The views expressed in this book are those of the authors and not necessarily those of FTI Consulting Inc.
Dedications
My love and appreciation go to my wife, Ameesha, and my son, Karthik, for their unwavering support, understanding, and encouragement during this endeavor. — Vijay
I’d like to dedicate this to my husband Henry S. Shraibman for helping me pass the audit part of the CPA examination and for his endless help with the stories of frauds from his long auditing career. Also to my children Joseph, Sara, and Avi for being patient while I spent endless hours writing. — Frimette
Authors’ Acknowledgments
The authors would like to acknowledge the following for their help with this book:
Toby Birnbaum, Esq., assistant professor of business law at Brooklyn College-CUNY
Susan Gross, CPA, JD, Feldman, Meinberg & Co
Clair Greifer & Assoc LLP, Feldman, Meinberg & Co
Carol Markman, CPA
Many students at Brooklyn College who contributed to Chapter 24; special thanks go to Arthur Nazarov, Winnie Yuen, and Nick Zavanov
For sharing their many experiences and war stories over their many years as auditors, we would like to thank:
Henry Shraibman, Bank Examiner, NYS Dept. of Banking
Prof. Sy Jones, CPA, New York University
Prof. Julius Cherney, CPA, Baruch College-CUNY
Authors would also like to thank the following people for their help and expertise:
Jamal Ahmad
Veeral Gosalia
Stephen O’Malley
Lisa Dane
Salahuddin Kamran
Dhruv Phopalia
Joseph Foy
Peter Kyviakidis
Roger Siefert
Publisher’s Acknowledgments
We’re proud of this book; please send us your comments at http://dummies.custhelp.com. For other comments, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002.
Some of the people who helped bring this book to market include the following:
Acquisitions, Editorial, and Media Development
Project Editor: Susan Hobbs
Acquisitions Editor: Stacy Kennedy
Copy Editor: Susan Hobbs
Editorial Program Coordinator: Joe Niesen
Technical Editor: Brian Muncy, CPA, CFE
Editorial Manager: Jennifer Ehrlich
Editorial Supervisor and Reprint Editor: Carmen Krikorian
Editorial Assistants: David Lutton, Jennette ElNaggar
Cover Photos: ©iStockphoto.com / Feng Yu
Cartoons: Rich Tennant (www.the5thwave.com)
Composition Services
Project Coordinator: Katie Crocker
Layout and Graphics: Carl Byers, Vida Noffsinger, Lavonne Roberts, Laura Westhius
Proofreader: ConText Editorial Services, Inc.
Indexer: Estalita Slivoskey
Publishing and Editorial for Consumer Dummies
Diane Graves Steele, Vice President and Publisher, Consumer Dummies
Kristin Ferguson-Wagstaffe, Product Development Director, Consumer Dummies
Ensley Eikenburg, Associate Publisher, Travel
Kelly Regan, Editorial Director, Travel
Publishing for Technology Dummies
Andy Cummings, Vice President and Publisher, Dummies Technology/General User
Composition Services
Debbie Stailey, Director of Composition Services
Introduction
So, what exactly is forensic accounting? If you’re signed up to take a course on the subject or are considering where you’d like your accounting career to take you, you may be reading this page because you’re looking for clarity about what the field of forensic accounting entails.
The word forensic usually inspires visions of Law and Order or CSI scenarios: a crime was committed, and detectives are gathering forensic evidence to try and figure out the cause and manner of death. But accounting inspires visions of debits, credits, and financial statements. How could these two words possibly fit together?
When you realize that forensic means applying scientific knowledge to legal issues, the phrase becomes easier to figure out. Forensic accounting is the study and interpretation of accounting evidence for presentation in a legal forum.
Most of the time, forensic accounting is used when someone commits fraud. For this reason, forensic accountants are often referred to as fraud investigators or fraud examiners. Fraud takes many forms, but at its heart, fraud is theft. Fraud is profiting by deceit or trickery; it involves the theft of funds or information or the use of someone’s assets without permission. Many fraud cases are small, but some are downright catastrophic, which is why names such as Enron and Bernie Madoff are now part of our cultural literacy. The latest statistics show that $2.9 trillion (trillion with a t) is lost every year due to fraud, so as a forensic accountant, you have the chance to be a bit of a superhero — at least to the stockholders and employees whose life savings may be preserved if you can nip a business fraud in the bud.
Not every forensic accounting engagement centers around fraud. Forensic accountants are also involved in commercial litigation, calculating damages that can literally run into the billions of dollars. (BP oil spill, anybody?)
And forensic accountants don’t always work on cases involving businesses. Sometimes, they’re hired to search for hidden assets during a divorce, to help a homeowner whose property has been stolen with the stroke of a fraudulent signature, or to protect the estate of an elderly person who’s been targeted by someone looking to make a quick fortune.
As we show you, the field of forensic accounting is new and growing explosively. If you think it may be the right path for you, we hope to help you better understand how exciting and challenging it can be.
About This Book
Most books about forensic accounting focus on one or two aspects of the field. This book is different — we wanted to give you a taste of every aspect of forensic accounting in a single book. We don’t provide as much detail about each aspect as a forensic accounting textbook might (we can hear you shouting for joy!), but that’s because our goal is different than a textbook’s goal. First, we want you to actually understand what you read! Second, we want you to walk away from each chapter understanding why that subject matters — how the information comes into play when you’re actually on the job.
We organized this book so that you can open up any chapter and start reading. If you’re looking for something in a jiffy — whether it’s information about inventory fraud or applying technology to prevent fraud — you can put your finger on it easily and read just that chapter or section without feeling lost.
We’re also big believers in the importance of rooting academic discussions in real life. For that reason, we provide lots of stories in this book about real fraudsters and their get-rich schemes (which often result in them getting arrested and getting imprisoned).
Conventions Used in This Book
This isn’t a book about financial accounting, so you don’t have to memorize loads of picky conventions. Just keep a couple things in mind as you read:
When we introduce a term that we think may be new to you, we put that word in italic and then define it for you.
When this book was printed, some Web addresses may have needed to break across two lines of text. If that happened, rest assured that we haven’t put in any extra characters (such as hyphens) to indicate the break. When using one of these Web addresses, just type in exactly what you see in this book, pretending as though the line break doesn’t exist.
What You’re Not to Read
We spent a lot of time creating this book, so we’d really like to believe that you’re going to savor every word! But we’re not that naïve. So here’s the scoop: If you’re in a rush and need to focus on the true nitty gritty, feel free to skip past the sidebars in this book: the gray boxes that are set apart from the rest of the text. (See how this whole italic/definition thing works?) We’ve included some really juicy stories in some of those sidebars, but they are truly asides. If time is short, read around them and know that you’re not missing any information that is crucial to your forensic accounting education.
Foolish Assumptions
We wrote this book believing that you’re either an accounting student or a fairly new accountant still feeling your way around the field. For that reason, we assume that you know very little about how to identify, investigate, and prevent fraud.
However, we do assume that you bring a certain level of accounting knowledge with you:
We trust that you have had a grounding in financial accounting. We don’t explain the basics of debits and credits, trial balances, and the mechanics of preparing balance sheets and income statements. If you haven’t yet taken an introductory accounting course, you need to do so for parts of this book to make sense.
We also assume that, courtesy of your introductory accounting course(s), you know something about auditing as well. For that reason, we don’t discuss the particulars of how an audit works. (We’d run out of pages in no time if we did so!)
Finally, we assume that you’re truly interested in learning new and exciting stuff, and that you picked this particular book because you want to have fun reading it. We had a great time writing it, and we tried to make it enjoyable. We can just about guarantee it’s more fun than any accounting textbook sitting on your shelf!
How This Book Is Organized
This book is divided into seven parts, each of which contains several chapters. Here, we run down what you find in each part.
Part I: Investigating Forensic Accounting
In Part I we provide an overview of forensic accounting, including what fraud is, who the buyers of forensic accounting services are, and what you should do when embarking on a career in forensic accounting. We discuss the most common types of fraud in the business and public sectors. And because not every forensic accounting engagement deals with fraud, we explain other types of engagements you will encounter during your career as a forensic accountant.
Part II: The Anatomy of Occupational Fraud
Occupational fraud is any type of fraud taking place within a business or institution (whether large or small). Part II starts out by discussing financial statement fraud, known as cooking the books. We then tell you about inventory fraud and revenue recognition issues. If you want to learn how businesses manipulate their own stock values and steer investor decisions that benefit the business (and often harm the investor), we give you that information as well.
Part III: It’s All in the Family: Fraud against Individuals
Many forensic accountants work on cases that don’t involve businesses or institutions. These chapters focus on the most common types of forensic accounting engagements that involve frauds perpetrated against friends, family members, and neighbors. You learn about what forensic accountants do when they’re hired by individuals who suspect their soon-to-be ex-spouses aren’t playing fair during divorce proceedings; when they investigate crimes that involve the elderly, estates, trusts, and life insurance; and when they’re called on to help people defrauded by real estate schemes.
Part IV: Meeting Your Methods of Investigation
This part details the methods most commonly used by forensic accountants to discover and investigate occupational fraud, as well as fraud against individuals. We walk you through the investigation process, getting information about subjects, and using technology in finding fraud. We then discuss the crucial role played by the forensic accountant prior to and possibly during litigation. This part outlines those responsibilities and offers insights into the specific requirements for litigation involving government and business entities.
Part V: Preventing Occupational Fraud
Deterring fraud is as important as investigating it, and accountants often counsel their clients on fraud prevention. The goal of this part is to teach you internal controls and fraud-deterrence techniques that reduce the probability of fraud. Small and large businesses have their own unique issues that we explore in this part. We also discuss the types of technology available to keep a business secure from fraud.
Part VI: The Part of Tens
This part is probably the most fun of all. We give you three short chapters to whet your whistle for the forensic accounting field. We start with a list of ten portrayals of fraud in TV and in the movies that you may want to add to your “must-watch” list. We continue with a chapter about ten frauds that are fairly common but often unsuspected. And we conclude with ten truly strange fraud stories that may leave you shaking your head.
Also, assuming that you want to know more about forensic accounting after getting initiated, we provide a short appendix that lists valuable online resources to check out.
Icons Used in This Book
In the left margins of this book, you find the following icons, each of which alerts you to specific types of text:
The Case File icon sits next to real-life stories that relate to the topic at hand. Fortunately for us, the world is full of fraudsters who supplied ample fodder for this book. Read all about them where you see this icon.
The Tip icon alerts you to actions you can take to improve your chances of discovering, investigating, and following up on fraud.
When you see this icon, you know the information in that paragraph is worth tucking into your mental filing cabinet for future use.
On rare occasions, we delve a bit deeper into the subject matter than you may need to go. This icon lets you know that the paragraph contains in-depth information that may offer more details than a student or beginning forensic accountant needs.
Where to Go from Here
The beauty about this book is that you can jump in anywhere: We’ve designed it so you can start in the middle or at the end and easily understand everything we’re saying. So spend a few minutes with the table of contents or index, locate a subject that’s particularly interesting to you, and jump in! Or, if your mind is just too linear for that approach, feel free to turn the page and head to Chapter 1. Either way, we’re confident you’re going to enjoy the time you spend with us, so let’s begin!
Part I
Investigating Forensic Accounting
In this part . . .
We start at the very beginning, by explaining what forensic accountants do, how their work differs from the work done by other accountants and auditors, and how you can steer your career toward forensic accounting by taking the right courses and looking for the right types of jobs.
We then get deeper into the discussion of why forensic accountants are necessary (and becoming more in demand every day). The reason for this is because lots and lots of people commit fraud. We devote a whole chapter to outlining the most common types of fraud, focusing largely on those committed within businesses. Forensic accountants don’t always deal with fraud, however, so we also offer a chapter explaining other types of work you may do as a forensic accountant.
Chapter 1
Why the World Needs Forensic Accountants
In This Chapter
Keeping accounting and auditing straight
Figuring out what forensic accounting is
Getting an overview of fraud
Considering where forensic accountants work
Enron, WorldCom, Tyco, Bernie Madoff — their names are infamous, and they’re all known to us for the same reason: fraud. Recent estimates indicate that almost $3 trillion is lost globally to occupational fraud and abuse (the kind that occurs within a business) each year. That number would seem hard to believe if we hadn’t all heard about the massive scale of fraud that has occurred at businesses such as Enron.
Investigating fraud can be complex. In a larger engagement, forensic accountants assist in performing various procedures that include reviewing millions and millions of documents, decoding financial information, interviewing scores of people, and gathering background information about key company players. Using technology is critical to the investigative process, and at the end of the investigation forensic accountants report their findings and sometimes provide testimony in a litigation context.
Lesen Sie weiter in der vollständigen Ausgabe!
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Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
Lesen Sie weiter in der vollständigen Ausgabe!
