FORENSIC INVESTIGATIVE ANALYSIS
FORENSIC INVESTIGATIVE ANALYSISFollow us on social media!@accgp@delvaccaApril 24, 2019 In-House Counsel Conference
FRAUD STATISTICS
Association of CFE’s Report to the Nations Global fraud study on Occupational Fraud and AbuseAnalysis of 2,690 cases of occupational fraud from January 2016 throughOctober 2017Goals of report is to show: Percentage of organizational revenue lost to fraud each yearWays in which occupational fraud occursCharacteristics of individuals who commit occupational fraudCharacteristics of organizations that are victimized by occupational fraudProprietary and Confidential3
The Cost of Fraud Fraud costs organizations an estimated 5% of revenue a year, orapproximately 4 trillion worldwide. In just the 2,690 cases, losses exceeded 7.1 billion in direct losses; itdoesn’t calculate indirect costs such as reputational harm or stakeholderrelationships. Three general categories of occupational fraud consistent throughout time,even with change in technology:1.2.3.CorruptionAsset MisappropriationFinancial Statement FraudProprietary and Confidential4
Calculation of Losses Caused by FraudProprietary and Confidential5
Frequency and Median Loss ofOccupational FraudProprietary and Confidential6
7
8
Detection of Occupational FraudsProprietary and Confidential9
Position of PerpetratorProprietary and Confidential10
Fraud Triangle
Incentive / Pressure Incentive / Pressure First leg of the fraud triangle. An individual may have some financial problem and may consider committingillegal acts as a way of solving the problem. Problem may be personal or professional. Examples include: Inability to pay bills Drug or gambling addiction Maintain investor confidence Maintain or meet productivity targets Desire for status symbols
Opportunity Opportunity Second leg of the fraud triangle Method by which the crime can be committed Must see some way the fraud perpetrator can be abuse his/her position atthe company to solve the financial problem A perceived low risk of being caught Secretive solution since many white-collar crimes are committed to maintainsocial status
Rationalization Rationalization Third leg of the fraud triangle Most fraud perpetrators are first-time offenders with no criminal past See themselves as ordinary, honest people who are caught up in badcircumstances Justifies the act to make it an acceptable behavior Examples include: “I was only borrowing the money” “I had to steal to provide to my family” “I was underpaid, my employer cheated me” “My employer is dishonest to others”
Forensic Accounting Terminology Internal Fraud / Occupational Fraud The use of one’s occupation for personal enrichment through the deliberate misuse orapplication of the organization’s resources or asset. Employee, manager or executive commits fraud against the employer External Fraud The risk of unexpected financial, material or reputational loss as the result of fraudulentactions performed to individuals or companies outside of the firm. Bid-rigging schemes, fraudulent bills for goods and services not performed, demandingbribes, etc. Fraud Against Individuals Identify theft, Ponzi schemes, phishing schemes, etc.
Fraud TreeAssetMisappropriationCorruptionConflicts ofInterestBriberyIllegal GratuitiesEconomicExtortionFinancialStatement FraudAsset/RevenueOverstatementsCashInventory andOther AssetsAsset/RevenueUnderstatements
Financial Statement Fraud Enacted in 1977, the Foreign Corrupt Practices Act (“FCPA”) Requires companies to keep books and records: “which inreasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the issuer.” There is strict liability for inaccurate and insufficientbooks and records, which do not require materiality orscienter.
What is Forensic Accounting? FORENSIC: Refers to items used in debate or argument. In commerce or business, things forensic are generally thosethings that relate to a legal forum or court. ACCOUNTING: “The language of business”. Quantifying data for financial purposes; accounting refers tomany activities that relate to financial accounts.
What is Forensic Accounting? The use of accounting for legal and investigative purposes. Integration of accounting, auditing, and investigative skills. Provides an accounting analysis which will form the basis of discussion, debate anddispute resolution. The use of intelligence-gathering techniques and accounting to develop informationand opinion for use by attorneys involved in civil litigation and give trial testimony ifcalled upon. Identifying, recording, settling, extracting, sorting, reporting, and verifying pastfinancial data or other accounting activities for settling prospective legal disputes orusing such past financial data for projecting future financial data to settle legaldisputes. Encompasses both Litigation Services and Investigative Accounting.
Need for Forensic Accountant Investigations Mergers & Acquisitions Litigation Internal Control Analyses Prevention and Risk Management
Role of a Forensic Accountant Plan Analyze Interview witnesses Identify participants Calculate losses Communicate Serve as expert witness
Documentation Considered Financial Statements (P&L’s) Monthly Annual Segmented Departmental/Divisional Consolidated Tax Returns Budgets/Forecasts/Projections General and Subsidiary Ledgers Purchase Orders Invoices Contracts
Presenters: Colleen S. Vallen, CPA/CFF – Citrin Cooperman cvallen@citrincooperman.com 215-545-4800 Caroline Henrich, Esq. - H&M Shared Services, Inc. (A Henkels & McCoyGroup Company) chenrich@henkels.com 215-283-7997
Questions
A reminder about the benefits of ACC membership Free CLE, like the one you’re attending right now Roundtables Networking meetings Special events Spring Fling, Fall Gala, Diversity Summer Program, Golf Outing,Pro Bono clinics, Charity Softball Game & Family Fun Day, and more! Access to ACC resources, including: ACC Newsstand (customizable updates on more than 40 practice area) ACC Docket Magazine InfoPAKs QuickCounsel Guides For more information or to refer a new member, see your hoststoday or contact Chapter Administrator, Chris Stewart, atChrisStewart@ACCglobal.com.
Apr 24, 2019 · What is Forensic Accounting? The use of accounting for legal and investigative purposes. Integration of accounting, auditing, and investigative skills. Provides an accounting analysis which will form the basis of discussion, debate and dispute resolution. The use of intelligence-gathering techniques and accounting
Forensic Science is the integration of core scientific disciplines. Forensic science involves a variety of careers. 1. Students will recognize the major contributors to the development of Forensic . Worksheets Lab; Activity Project assessments Research activities such as “famous forensic scientists and their contributions” or “careers inFile Size: 444KBPage Count: 21People also search forforensic science for high school textbook pdfdo forensic criminologist investigate the cri forensic criminology bookswhat is a dental hygienisthow to check fingerprint forensic criminologyare dental hygienists and dentist same thing
forensic science discipline (or equivalent). Experience It is essential that the post holder is an experienced forensic scientist in forensic drug analysis, forensic toxicology and preferably in forensic criminalistics, with a minimum of 10 years performing multi-disciplined forensic
The Diploma in Investigative &Forensic Accounting (DIFA) Examination Syllabus (Applicable From January 2014 Exam) The Diploma in Investigative & Forensic Accounting (DIFA) program is designed to provide intermediate or equivalent, with the skills, knowledge, insights and professional characte
Forensic science is the application of science to law. Any science can be applied into a legal situation, but some of the commonest forensic sciences include forensic biology, forensic chemistry, and forensic toxicology. The word forensic in today’s world simply
Forensic Psychology Chapter ObjeCtives ·orensic Define f psychology. · Review career areas in the forensic sciences. · Distinguish forensic psychology from forensic psychiatry. · Identify and describe the major subareas of forensic psychology. · Review the educational, training, and certification requirements to become a forensic psychologist.
Delivering forensic services (Report 21: 2018-19) 4 . Summary of audit findings . Delivering forensic services . We audited four types of forensic services: fingerprints, deoxyribonucleic acid(DNA), forensic medical examinations and illicit drugs. Three of these services accounted for approximately 92 per cent of all forensic services .
Chapter 1 Forensic and Investigative Accounting 5. Forensic Accounting Defined. Forensic accounting is the action of . identifying, recording, settling, extracting, sorting, reporting, and verifying past financial data or other accounting activities for settling current or prospective legal disputes or usingFile Size: 2MB
integrated forensic accounting, functional model as a combined accounting, auditing and digital forensic investigative process. Before this approach can be properly validated some future work needs to be done, too. Key words: fraud, financial accounting, financial fraud, forensic accounting, d
