...Assignment #3 Forensic Accounting in Practice Professor Demetrius Carolina, Sr. Bus 508-Contemporary Business February 16, 2013 The purpose of my paper is to explore Forensic Accounting and the many aspects surrounding the field. I will determine the skills necessary to be a forensic accountant and its application to business operations. I will also describe the role the forensic accountant plays in a courtroom environment and the role played by the forensic accountant in the litigation process. I will also provide case examples where forensic accountants are used and have provided vital evidence in the case. Today, forensic accounting is a rapidly growing segment of the accounting practice, and the current demand for forensic accountants far outstrips the current supply. Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. Have you ever been cheated, robbed or financially hurt by actions of others? Well, out of those feelings civil lawsuits arise based on the desire to reclaim what one perceives he/she has lost unjustly. Financial loss isn’t always easy to define or measure. So, the important task of investigating and quantifying the financial loss normally requires the expertise of a forensic accountant. A forensic accountant is a professional who uses a unique...
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...Forensic Accounting in Practice: Forensic Accountants: Fraud Busters A forensic accountant is part investigator, part auditor, part attorney, and part accountant (Levanti, T.). Due to the increase in high-profile cases of companies and individuals, forensic accounting is a growing and popular field in the business and forensic subjects. A forensic accountant is someone who is often retained to analyze, interpret, summarize, interviews and present complex financial and business related issues in a manner that is both understandable and properly supported (Zysman, A.). Forensic accountants usually work in a public practice or are employed by insurance companies, banks, police or government agencies. They are to investigate and analyze any financial evidence, communicate their findings in reports or documents and assist in legal proceedings, such as testifying in court as an expert witness (Zysman, A.). Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. I think the five most important skills that a forensic accountant needs to posses are to be: (1) analytical, (2) detail-oriented, (3) ethical, (4) responsive, and (5) insightful (Davis, Farrell & Ogilby). Analytical The need to be analytical in a forensic accounting engagement may be the most important overall characteristic, without...
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...Running head: THE FORENSIC ACCOUNTANT FORENSIC ACCOUNTING IN PRACTICE Tanon Patrick Contemporary Business - BUS 508 Dr. Ronnie A. Jones December 20, 2013 Abstract Accounting is the systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. It reveals profit or loss for a given period, and the value and nature of a firm's assets, liabilities and owners' equity (Business Dicitionary.com). Accountants take a vow to ensure the accuracy of all financial records for the company they work for. When a company suspects fraudulent activity they often call in a forensic accountant to help with the investigation. The forensic accountant has the skills to investigate what happened, to measure damages, and to provide litigation support to corporate and outside counsel (Flexstudy.com). FORENSIC ACCOUNTING IN PRACTICE Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. This paper will give some incite on the different levels of responsibility and skills that the forensic accountant must have to provide quality service. “Accounting professionals work in a variety of areas in and for business firms, government agencies, and not-for-profit organizations. They can be classified as public, management, government, and not-for-profit accountants” (L.E. Boone...
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...Forensic Accounting In Practice Contemporary Business 508 This paper discusses the role of forensic accounting practices. It takes a look at the skills sets of forensic accountants and the role they play out in the court room. It goes also analyzes the legal responsibilities of a forensic accountant form a professional perspective as their role for expert opinion in the court room. A forensic accountant is someone uses their accounting credibility for investigative or other legal applications, such as corporate acquisition, divorce proceedings, insurance settlements, or other legal purposes (Brody, Melendy, & Perri, 2012). Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. The first identifiable important skill for a forensic accountant to posses is investigative intuitiveness. The forensic accountant should possess creative and analytical thinking (DiGabrielle, 2008). According to DiGabrielle, the ability to solve a financial puzzle with an incomplete set of pieces is an extremely important characteristic for forensic accountants (p. 336). The forensic accountant is providing a service to a client for the purpose of expert information as it pertains to legal matters or for the purpose of finding or preventing financial misrepresentation. Their role is not to merely...
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...Forensic accounting, sometimes referred to as investigative accounting, is a unique career field that combines accounting with information technology. A forensic accountant uses sophisticated computer programs to analyze financial data and find evidence that would be legally valid during a court proceeding. Forensic accountants are often asked to review financial records for mergers and acquisitions. They may also serve as advisers to a corporation’s audit committee or work to resolve shareholder disputes within a company. Increasing number of cheater people and organizations on accounting and result of its economic damages, economic and commercial disagreements and increasing number of misleading enforcements for the users of financial statements (such as Fuzzy Accounting and Creative Accounting) has been caused of existence of Forensic Accounting. It has widespread practice area in developed countries. Forensic Accounting uses techniquies of researching, accounting and inspecting. So Forestic accountants need to have abilities to do that job. In this research I am going to determine most important skills and legal responsibilities of forensic accountants and role of forensic accountants in courtroom. Required and Expected Skills According to AICPA’s CFF Credential Committee’s survey, the most important skills that a forensic accountant should have are; Thinking analytical (It is the main requirement, like medicine knowledge of a doctor.) , being detail-oriented (...
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...Forensic Accounting in Practice Gabrielle Bryant Dr. Carolyn Green Contemporary Business 11/17/2013 Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations Although forensic accounting is not a new field, it has become more talked about since cases like Enron came to light. For someone interested in the Forensic Accountant profession they should know that this field can be time consuming, but very rewarding. People who work in this career investigate white collar crimes such as company fraud, fraudulent financial record reporting, and illegal investment schemes. In a recent study by the Federal Bureau of Investigation shows that white collar crimes have cost the United States and estimated 300 billion dollars (DiGabriele 2008). I think five of the skills that a forensic account would need are communication skills, detail oriented, professional and ethical behavior, sound judgment and discretion. Communication skills are vital in any profession. It allows you to convey information for others to receive. The problem with communication is that it can be interpreted differently by other intended parties. As a forensic accountant, communication skills, verbal and non-verbal, are important when it comes to conducting interviews and gathering information. After gathering the records, forensic...
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...Running Head: FORENSIC ACCOUNTING IN PRACTICE Forensic Accounting in Practice Marc Fantone Strayer University Dr. Etta Steed November 17, 2013 Accounting, historically, has been a profession of number tracking, ledger updating and balance sheet reviewing; however, more recently, the need for a skeptical view of accounting business records has developed. In recent years, scandals such as Enron and Bernie Madoff have called for immediate action and needs of forensic accountants with a change in oversight to investigation. According to Zare, “Forensic accounting is unique in that it combines accounting with investigation. These bloodhounds as opposed to the watchdogs that are auditors attempt to sniff out fraudulent transactions from the financial records of banks and companies.” (Zare, 2013) By definition, forensic can be defined as “relating to, used in, or suitable to a court of law.” (Merriam-Webster, 2013) How can this increased level of accounting review and accuracy develop into a role that supports litigation and laws such as the Sarbanes-Oxley Act? The level of forensic accounting has led to the development and thought processes of what it actually means to be a forensic accountant. Five (5) Skills of a Forensic Accountant In addition to the basic functionality of a standard accountant, there are additional skills that would be needed for forensic accounting. The skills needed for forensic accounting are associated with practices of the occupation...
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...“Forensic Accounting” is a term that you do not hear every day so let’s examine its definition. The Strayer University BUS508 textbook defines accounting as, “The process of measuring, interpreting, and communicating financial information to enable people inside and outside the firm to make informed decisions.” Merriam-Webster defines forensic as, “suitable for a court of law.” Our textbook defines forensic accounting as, “Forensic accounting is accounting performed in preparation for legal review.” The textbook also describes it as, "focus on uncovering potential fraud in a variety of organizations.” The Business Dictionary defines it as a, “Criminal investigation practice whereby investigators analyze financial documents and activities to determine if and how a crime, such as fraud, has been committed by an organization. Tactics include tax analysis, financial reporting review and banking activity oversight.” This also includes white collar crimes such as embezzlement, stock market manipulation and price fixing schemes. This can include the financial impact of marketplace events, such as intellectual property infringement, anti-trust actions, financial reporting fraud, asset impairment and business valuation (Neumann, O'Connor, 2008). It also includes matters of family law, such as matrimonial disputes. In short, "Forensic accounting is the use of accounting, auditing, and investigative skills to assist in legal matters.” They use accounting skills following the GAAP (generally...
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...skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. A study conducted by two professors from Rider College interviewed over 150 lawyers, Certified Public Accountants (CPAs) and accounting educators. The study identified sixteen skills needed by forensic accountants. According to the study, the five most important skills are analytical skills, basic accounting skills, problem solving skills, data analysis skills and interviewing skills (McMullen & Sanchez, 2010). Forensic accountants need analytical skills because as they review financial reports and other source documents, they need to analyze the validity of each transaction and determine if the company recorded the transaction fairly. The forensic accountant needs the ability to analyze where the data came from and whether the data accurately reflects the numbers posted in the financial reports (McIntosh, n.d.). With an in house forensic accountant, this will ensure the company’s financial state is accurately reflected while an independent forensic accountant can verify the accuracy of the reports, both of which help investors determine if the company is worth investing in. “Accounting is widely regarded as the language of business” (McMullen and Sanchez, 2010, pg.1). As such, the need for basic accounting skills is self-evident, for a forensic accountant to be...
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...Assignment 1: Entrepreneurial Leadership Ericka Bradley Prof: Bagher Fardanes, Ph.D., MPA Business 508 Contemporary Business 18 April 2013 The first Five Guys restaurant opened in 1986 in Arlington Virginia founded by Janie and Jerry Murrell The name Five Guys was inspired by Murrell’s five son’s Matt, Jim, Chad, Ben, and Tyler which are currently involved in the business. Matt and Jim travel visiting over 1000 locations, Chad oversees the training of new employees, Ben is in charge of selecting the rapid growing franchisees, and Tyler is in charge of running the bakery department. Most Five Guys restaurants have a simple layout of tables and chairs for dine in customers where there are bags of potatoes stack along the wall for lack of storage space and also peanuts to enjoy while you wait for your order to be ready. The kitchens are open behind the counter which is used for placing and picking up your orders. The restaurant’s décor is simply a layout of red and white checkered tile, because of the owner’s high concentration on the best juiciest burger on a fresh bun and perfect fresh cut fries. Five Guys uses only 80/20 fresh ground chuck high quality ground beef never frozen with no fillers. They do not use ammoniated procedures to treat the groud beef which means that there is no “pink slime” in the burgers. Five Guys purchase all of their raw materials from major meat suppliers in the United States that follow all procedures set forth by the USDA. The burgers are...
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...Forensic accounting is the specialty practice area of accountancy that describes engagements that result from actual or anticipated disputes or litigation. "Forensic" means "suitable for use in a court of law", and it is to that standard and potential outcome that forensic accountants generally have to work. Forensic accountants, also referred to as forensic auditors or investigative auditors, often have to give expert evidence at the eventual trial. There are several organizations worldwide that provide continuing education and certification for forensic accountants. There has been a growing need for this specialized field with recent company scandals that have occurred. Forensic accountants utilize an understanding of business information and financial reporting systems, accounting and auditing standards and procedures, evidence gathering and investigative techniques, and litigation processes and procedures to perform their work. The main goal of their engagements is to provide the answers to the how, where, what, why, and who committed the alleged allegations. They will use the same basic procedures for obtaining evidence of the crimes that they investigate. They will examine records and interview suspects to determine the answers to these questions. Forensic accountants are also increasingly playing more proactive risk reduction roles by designing and performing extended procedures as part of the statutory audit, acting as advisers to audit committees, fraud deterrence...
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...Journal of Forensic & Investigative Accounting Vol. 4, Issue 2, 2012 The Obvious Fraud: A Short, Problem-Based Case Study to Highlight Inappropriate Fraud Examination Techniques David O’Bryan Jeffrey J. Quirin* INTRODUCTION Assume you are an internal auditor for a large, multinational, manufacturing organization with a division in Mexico. One of your responsibilities is to investigate allegations made on the company’s fraud hotline. When you arrive at work one morning you learn an anonymous tip was left on the hotline that alleges fraud involving the division manager. “Pat’s significant other is a fraudulent vendor,” was the anonymous tip left on your company’s fraud hotline. Pat is a division manager at your company. “Wow. I can’t believe this guy is so blatant,” you’re thinking as you review some accounts payable invoices while following up on this anonymous tip. The invoice that caught your attention is shown in Table 1. A quick search of the AP file reveals a total of three invoices like the one in Table 1, all for identical amounts but on different dates. The division manager, Pat, has the authority to approve payment of invoices for less than $10,000. It is obvious to you that the manager has a created a shell company. You happen to know that Pat’s significant other is named Kim, hence the name Kimco Marketing. There is no documentation to support these transactions other than the invoices, all of which are purportedly for marketing services. * The authors are, respectively...
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...Forensic Accounting in Practice Twana Bethea BUS 508 May 21, 2013 Dr. Phyllis Praise Abstract Forensic Accounting is the application of the skills and training of a chartered accountant to disputes and investigations. Fraud is usually hidden in the accounting systems of organizations and that’s where forensic accountants play a critical role. Forensic accountants are contacted by companies when they need to figure out where a fraud was committed in their company. The accountants interview witnesses, analyze evidence such as email traffic between all parties involved. They will also freeze bank accounts if needed. They are hired to find out what happen and who was involved. If the case goes to trial they can be called to testify. The key skill of the forensic accountant is communicating complex financial transaction or data in a concise manner using images, graphs and languages that can be easily understood by non-accountants, the judiciary, and juries. With the growing complexity of business related investigations, Forensic Accounting professionals are increasing and the need is as well for investigations of business and financial issues. Forensic Accounting Practices Forensic Accounting has been in exist for many years, today there have been an increase in the need for this type of profession. Forensic accounting is the practice of integration of accounting, auditing and investigative skills. The accountings provide a court with an accounting analysis on the basis...
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...Forensic Accounting In Practice Herbert Lee | Bus 508 Professor Badger Fardanesh 1. May 16, 2013 Forensic Accounting Defined According to Crumbley (2009)“ Forensic Accounting” is reducing the complexity of accounting practices by distilling information and slicing away at deceptions to help a judge or jury to see the essence of financial disputes. It is a practice that goes beyond auditing and analyzing accounting information. With accounting practice and standards at its core Forensic accounting goes above and beyond what the auditor does. Crumbley (2009) contends that a forensic accountant may take on fraud auditing engagements but will use other accounting, consulting and legal skills to broaden their engagements. The discipline of forensic accounting is being utilized not only in a courtroom setting but also in public discussions, debates, civil matters like divorces, insurance companies, banks and the business community at large. From a general perspective forensic accounting focuses on digging into the final accounts but will follow a lead into records of original entries. These accountants cover the areas of litigation support and investigative accounting. They are seeking out the cause and effect and according to the article FTB Tax Services (2011) it states that the primary orientation of forensic accounting is the explanatory analysis of phenomena- including possibly the discovery of deception, and its effect- introduced into an accounting system domain...
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...Using Teams in Production and Operations Management: Forensic Accountants: Fraud Busters. By: For: Class: Bus 508: Contemporary Business Date: 13 November 2012 Abstract: A case study for the Strayer University, Woodbridge, VA, Business 508 class, this paper provides for a brief review of 1) The skills that a forensic accountant requires; 2) The role of the forensic accountant in the courtroom; 3) The legal responsibilities of the forensic accountant; and lastly, 4) The role of the forensic accountant in a couple of major accounting fraud scandals. The world of Accounting has seen several major scandals since the early 1990s. These include major accounting failures such as Enron, WorldCom, Adelphia, Tyco, Phar-Mor, Cendant, Computer Associates, AOL, Freddie Mac, ImClone, Qwest Communications, Royal Ahold, Health South Corporation, AIG, Lehman Brothers, and most recently the Olympus Corporation. Some of these have resulted in the collapse and dissolution of the company – Enron, Adelphia; others have resulted in a major restructuring of the company – AOL, AIG, Freddie Mac. Whatever the result, they have all been caused by accounting fraud – either “cooking the books” to hide major losses or to hide the theft of funds. It has also resulted in the failure and absorption of the one of the Big Five Accounting firms – Arthur Anderson. Besides the whistle blower who brought most of these to public view and the lawyers who have been involved their dismantling...
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