Forensic Accounting. Ms. Dhir. Forensic Accountant (FoA) #IMASLC17

Transcription

1 Forensic Accounting Ms. Dhir Forensic Accountant (FoA)

2 OUTLINE Introduction Definitions History Today (Industry, Public Accounting, Government (Crimes) ) Engagements Qualifications (Skills & Certifications, Traits) Prospects (Job Search, Entrance Career Path) Future Resources / Q & A 2

3 INTRODUCTION Education MBA (Concentration in Accounting) CPA Professional Experience Industry Public Accounting Government 3

4 DEFINITIONS Accounting = measure, process, & communicate financial info. (Tax, Audit, Financial, Cost/Operational) Forensic = investigate for & explain to the courts Fraud = hidden, intentional, criminal deception for gain Litigation = civil dispute resolution, mediation, consulting for clients (economic damages, business / personal valuations) Forensic / Investigative Accounting; Forensic / Investigative Auditing; Financial Forensics; (Forensic Investigating (Canada / India)) Fraud Examination Litigation Support Forensics Practice 4

5 HISTORY Edwin H. Sutherland (Indiana Univ. Criminologist) Occupational Fraud & Abuse Research (on executives) White-Collar Crime 1939 Theory of Differential Association, not genetics Donald Cressey (Student of Sutherland) Fraud Triangle 1940 s (Pressure / Rationalization / Opportunity) Joseph T. Wells Public Accounting Auditor FBI Agent of 10 years re. White-Collar Crime Association of Certified Fraud Examiners 1988 (ACFE) Enron / Worldcom / Arthur Anderson Sarbanes Oxley (SOX) Internal controls compliance w/sec re. publicly traded companies (other private business compliance too) 5

6 TODAY - INDUSTRY Internal Audit (via Board of Directors) Risk Management (Financial & Capital Investments) Internal Controls (Travel, M&E, T&A, Inventory) Governance/Compliance (Financial Statements, SOX) Customer Fraud Departments Banking Credit Card Companies Investment Firms Credit Bureaus Phone Companies Insurance / Security Companies IT Security - AIS 6

7 TODAY PUBLIC ACCOUNTING Audit Public (financial reporting) & private companies (credit / insurance due diligence) Increasing liability Litigation Support Economic Damages (breach of contract (non-compete etc.), shareholder/partnership disputes, commercial/personal injury claims, construction claims, product liability claims, trademark/patent infringements, etc.) Business, Asset, Goodwill, Merger/Acquisition Valuations Risk/Regression Analysis Separate Property Tracing (marital / inheritance disputes) Mediation / Arbitration Deposition Summaries Forensics Practice Fraud Examination (contract work w/govt. agencies, i.e. criminal occupational fraud etc. such as Enron) Computer Forensics 7

8 TODAY - GOVERNMENT Federal FinCEN (BSA, CTR, SAR, Money-Laundering) SEC IRS FBI NSA Department of Defense (defense contracts, DCAA) Department of Commerce Internal Audit Departments (inventory government property, etc.) State Comptroller of Public Accounts (Tax Audit Departments) Local County/Sherriff/Police Fraud Departments 8

9 TODAY GOVERNMENT (CRIMES) Corporate Fraud (Financial Statements, GAAP violations, White-Collar Crimes, etc.) Securities Fraud Healthcare Fraud Mortgage Fraud Insurance Fraud Mass-Marketing Fraud Bankruptcy Fraud Natural Disaster Relief Fraud Credit Card Fraud Occupational Fraud (further defined on next slide) Use of the Internet in Financial Frauds Public Corruption Transnational / Organized Crime Terrorist Financing Asset Forfeiture & Money Laundering (Virtual Currency, International Banking, Taxation etc.) 9

10 TODAY GOVT. (CRIMES CONT.) Occupational Fraud & Abuse (per Joseph T. Wells) Corruption Bribery Kickbacks Extortion Asset Misappropriation (greatest occurrence / least damage) Cash (Steal, Skim, Fraudulent Disbursements) Inventory (Steal, Misuse) Fraudulent Statements Financial Non-Financial (HR) 10

11 ENGAGEMENTS Meet with the client (big picture to key details, know all the players) Check for conflicts of interest Determine an action plan, objectives, methodology, time-frame Determine & obtain needed documents/evidence Conduct the actual analysis (keep an open mind/flexibility, the big picture/story behind the numbers is never a cookie-cutter scenario) Research laws, policies, processes (beyond the numbers) Spread transactions, trace assets/funds Summarize transactions Calculate economic damages Perform ratio analysis Perform life-style analysis Perform business valuations, present value calculations Perform risk/regression analysis Calculate/trace forfeiture funds/assets Assist with Examination for Discovery by formulating financial evidence questions, reviewing related testimony, determining further questioning needed Interview suspected or involved personnel Draft deposition summaries Draft a report (multi-step review/revisions) Share/discuss/revise Present or testify 11

12 QUALIFICATIONS SKILLS / CERTIFICATIONS Well-rounded Bachelor s or Master s (Master s preferred) accounting degree from a traditional classroom vs on-line setting (Tax, Audit, Financial/GAAP/Ratio Analysis, Oil & Gas, Mergers/Acq, Fraud Examination, Non-Profit, AIS, Law, Business Valuation, Mediation/Negotiation, etc.) CPA (Preferred), CFE, CFF, CIA, CITP (1-3 years work experience to maybe include internships) Excel, QuickBooks experience (Pivot Tables, Bar Graphs, Time-Lines, Link Charts, etc. as court exhibits) Investigative & database research skills to develop financial profiles; ability to identify/trace fund sources & interrelated transactions; & conduct varied financial analyses Written & verbal communication skills to assist in interviews/meetings with attorneys/clients/suspects; ability to write technical financial reports but simplified to reach broad audiences; & ability to assist with administrative items such as affidavits/warrants/subpoenas, etc. General legal knowledge of pertinent crimes and court procedures Collaboration/liaison abilities to work with private sector partners & government/law enforcement agencies Background check (to act as credible Expert Witness, handle/gather financial evidence in a secure/private/fiduciary manner) 12

13 QUALIFICATIONS - TRAITS Analytical / Strategic (big picture to small weeds detail) Personable / Interpersonal Communication (being able to gauge your audience in person (verbally) & in writing to both identify & simplify key points) Organized / Disciplined / Detail-Oriented Ethical / Credible / Discretionary / Trustworthy Objective / Skeptical / Independent Inquisitive / Persistent / Investigative Confident / Creative Intuition via Broad Experience 13

14 PROSPECTS JOB SEARCH Indeed.com Gen. Entry-Level Acct. ( 1 of 60, National Security Agency) FoA Specific (10, 4yr or adv. degree or exp., CPA/CPA ready, databases) Monster.com Gen. Entry-Level Acct. (0 of 75) FoA Specific ( 6, adv. degree or exp. preferred, CPA a plus, IT background) CareerBuilder.com Gen. Entry-Level Acct. ( 0 of 60) FoA Specific (4, Masters, CPA, or exp./internship preferred, travel required) 14

15 PROSPECTS ENTRANCE CAREER PATH Public Accounting (Big 4) Audit (local travel) over Tax Internal Audit (in industry, broader travel) IRS or state/local tax authorities w/entry-level audit positions (local travel; State Comptroller Franchise Tax audits etc.) 15

16 FUTURE International Financial Reporting Standards (IFRS) established by the International Accounting Standards Board (IASB) & other international accounting standards IT / Internet (On-line transactions, phone, gaming, virtual currencies, etc.) Global reach (political / cultural current events, traditions/culture, black-markets, & organized/transnational crime) 16

17 RESOURCES / Q & A Texas State Board of Public Accountancy; CPA, IFRS, etc. American Institute of CPA s (AICPA); (CPA) CFF, ABV, CITP, white-papers, job market data, etc. Association of Certified Fraud Examiners (ACFE); CFE, books, etc. Institute of Internal Auditors; CIA, SOX compliance Foreign organizations/certifications (Canada / India, etc.) 17

18 10 Paragon Drive, Suite 1 Montvale, New Jersey U.S.A. (800) (201)