Foensic Accounting
Corporations are often the victims of the most common white-collar crimes that occur in corporate America. According to the Association of Certified Fraud Examiners (cfenet.com), “abuse and fraud by employees cost U.S. organizations more than $400 billion annually…[which equals] $9 per employee per day.”
These statistics show the corporate need for forensic accountants, there also is an immense demand for these specialized accountants in the private sector. For example a forensic accountant is used to “quantify economic loss” (askhal.com) in personal injury cases.
Forensic accounting is “ an accounting analysis that is suitable to the court, which will form the basis for discussion, debate and ultimately dispute resolution.” (forensicaccounting.com) According to Hal Rosenthal, a certified forensic accountant, it is the “use of intelligence gathering techniques, accounting and business skills to develop information and opinions for use by attorneys involved in civil litigation and to give trial testimony if called upon.” (askhal.com) In other words, a forensic accountant checks an organization in case of a dispute, to see if any money discrepancies are present.
Forensic accountants can be critical in providing litigation support. Litigation support is the “assistance of an accounting nature in a matter involving existing or pending litigation.” (Philadelphia Business Journal, p.18)This type of support is often determining the amount of monetary damages.
Another aspect of forensic accounting is investigative accounting. This is the investigation of criminal matters, securities fraud, and kickbacks. For example, if an a person was laundering money, the forensic accountant would investigate how money was obtained and the process of how it was made into “clean” money.
Another key function of forensic accounting is forensic auditing. According to cfenet.com, it is the “examination of evidence regarding an assertion to determine its correspondence to established criteria carried out in a manner suitable to the court.” Audits are an essential way of evaluating an organization’s financial records. For example the government regularly performs an audit of a person’s income statements to determine the amount of taxes owed.
There are two forms of auditing: internal and external. People within the organization e...
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...ensic accountant is often retained to “quantify the economic loss arising form a motor vehicle accident.”(Philadelphia Business Journal) An accountant would also be used to determine the amount of compensation stemming form the case.
In insurance cases forensic accountant have a variety of duties. Insurance policies are often varying and full of certain clauses that create unique circumstances. ”Forensic accountants’ main priorities with insurance litigation involve review of policy and calculating loss through a prescribed methodology.” (cfenet.com)
Forensic accountants also consult on arguments such as matrimonial disputes, business economic losses, professional negligence, loss quantification, mediation, and arbitration.
With the “average organization losing 6% of its total yearly revenue by its own employees,” (cfenet.com) forensic accountants are needed to investigate and protect companies. These special types of accountants are utilized in every dispute that involves money. There is an incredible need for forensic accountants according to the Philadelphia Business Journal. In fact, they named forensic accounting as one the “hot 10 jobs in the accounting field.”
Individual Article Review Lily Cobian LAW/421 March 31, 2014 Ramon E. Ortiz-Velez Individual Article Review Introduction My article review is based on Sarbanes-Oxley and audit failure, a critical examination why the Sarbanes-Oxley Act of 2002 was established and why it is not a guarantee to prevent failure of audits. Sarbanes-Oxley Act talks about scandals of Enron which occurred in 2001 and even more appalling the company’s auditor, Arthur Anderson, found guilty of shredding company documents after finding out Enron Company was going to be audited. The exorbitant amounts of money auditors get paid to hide audit discrepancies was also beyond belief. The article went on to explain many companies hire relatives or friends to do their audits, resulting in fraud, money embezzlement, corruption and even the demise of companies. Resulting in the public losing faith in the accounting profession, the Sarbanes-Oxley Act passed in 2002 by congress was designed to restrict what company owners and auditors can and cannot do. From what I gathered in the article, ever since the implementation of the Sarbanes- Oxley Act there has been somewhat of an improvement but questions are still being asked as to why there are still issues that are not being targeted in hopes of preventing more audit failures. The article also talked about four common causes of audit failure: unintentional auditor mistakes, fraud, fatigue and auditor client relationships. The American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct clearly states an independent auditor because it produces a credible audit, however, when there is conflict of interest, the relation of a former employer, or a relative or even the fear of getting fire...
Hiring of forensic science technicians is expected to go up twenty-seven percent from 2014-2024. That is much faster than usual. However, that will only result in 3,800 jobs in a ten year period. Competition for this job will be stiff. The reason for only 3,800 jobs in a ten year period is because the media has popularized forensic science and people have grown interested in
First, what is a forensic analyst? What do they do and why do they need math? Forensic analyst use scientific techniques to solve criminal cases. From finger printing with the help of computers, blood analysis, forensic dentistry, also voice and speech spectrograms and genetics. Forensic analyst use bloodstain patterns in order to tell the story of the crimes. Location of the blood, where it lands and the shape on landing surface reveals the direction the blood was moving and even the force used to wound or murder the victim. Math principles are used to figure out ...
to seek justice, a Forensic Accountant can be utilized to help with recovering the damages caused
Collecting, analyzing, and evaluating evidential matter lies at the heart of the work of forensic accountants. Forensic accountants wear many hats, including identifying issues, gathering information and documentation, analyzing data, and reporting their findings. Forensic accountants are typically involved in many areas of financial disputes and investigations, including but not limited to fraud investigations, construction claims, bankruptcy, business valuation, expert testimony, personal injury, wrongful death, and more. Communication skills, objectivity, an investigative mentality, and an understanding of the rules of evidence are all necessary facets for a forensic accountant. Therefore, while detecting fraud in the process of covering such large areas, forensic accountants face many problems.
Forensic science plays a vital role in the criminal justice system by aiding an investigator’s case with scientific information based on the analysis of the evidence. Each crime scene is unique in its own way and using the evidence collected, forensic experts try to piece it together. An expert is someone who has had enough education, training, and experience to testify to the matter at hand (Harmon 2010). Unlike other witnesses in a case who testify based on first hand knowledge, the expert witness is not required to have firsthand knowledge of a particular case, and in fact, often does not. Rather, the expert witness testifies to the meaning of the facts (Whitcomb et al. 2005). Each forensic expert typically has a background in another scientific discipline, such as biology, physics, chemistry, etc. An expert with a biology background may work with DNA; chemistry may work in toxicology; and physics in blood spatter trajectories. Working separately on their own respected evidence, an investigator is able to collect all their data and set up a case (National Institute of Justice 2013). Usually, these experts will be hired by either the prosecution or defense in a criminal trial, or by a plaintiff or defendant in a civil litigation. The role of the expert witness exists in variants: between criminal and civil courts as well as the prosecution and defense.
Financial Accounting is ‘Asset valuation, accounting record completeness and accuracy, accounting estimates, reporting transparency, fair value accounting issues, convergence of accounting standards, evolution of accounting standards, audit efficiency and effectiveness’, as suggested by Accounting Dictionary (2014).
Accounting is basically a service activity. Its purpose is to provide quantitative information that principally used by the managers, investors, tax authorities, and other decision makers to make the financial decisions within companies, organizations, and public agencies. Accounting is also widely known as the “language of business.” An accountant measures, communicates, and interprets financial activities. They prepare financial statements or reports for individuals, businesses, government agencies, or other non-profit organizations. They use the accounting systems to categorize the expenses and income to the typical groups. They also keep tract of the money received or paid out to see if the transactions are accurate and complete. Accountants are familiar with the computer operation. They use the computer...
... associated to civil disputes. Forensic accountants are also identified as fraud investigators, investigative accountants, forensic auditors or fraud auditors.Forensic accountants are also increasingly playing more proactive risk reduction roles by devising and performing extended procedures as part of the statutory audit, acting as consultants to audit committees fraud deterrence engagements, and aiding in investment analyst research.
ABSTRACT: The quantity of accounting fraud cases keeps on rising. Fraud is a consistent thing that will reliably be around, and in a bigger number of routes than just a single. An extensive apportionment of organizations out there fighting fraud, either from within the organization, or from outside the organization. Knowing how to manage this is essential for an organization to be productive over an extended period of time. The investigation regarding the matter of accounting fraud will utilize sources from the web and the DeVry School Library.
Forensic investigations require skills of specially trained scientists, police, engineers, doctors and others. “These investigators observe all types of evidence, from weapons to bloodstains and from computers to bugs” (Erzinclioglu 5). The greater the evidence against a person, the greater the chance of conviction.
The evolution of auditing is a complicated history that has always been changing through historical events. Auditing always changed to meet the needs of the business environment of that day. Auditing has been around since the beginning of human civilization, focusing mainly, at first, on finding efraud. As the United States grew, the business world grew, and auditing began to play more important roles. In the late 1800’s and early 1900’s, people began to invest money into large corporations. The Stock Market crash of 1929 and various scandals made auditors realize that their roles in society were very important. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. The auditors’ job became more difficult as the accounting principles changed, and became easier with the use of internal controls. These controls introduced the need for testing; not an in-depth detailed audit. Auditing jobs would have to change to meet the changing business world. The invention of computers impacted the auditors’ world by making their job at times easier and at times making their job more difficult. Finally, the auditors’ job of certifying and testing companies’ financial statements is the backbone of the business world.
Forensic science is a particularly large field of work to be a part of. There are many important parts to it that are all very different. In short, forensic science deals with applying scientific knowledge to legal and criminal situations. As mentioned earlier, forensic sciences is an extremely large field of work. There are forensic engineers, forensic geneticists, linguists, phoneticians. All of which, work together to uncover crimes by using science. In any given case forensic scientists may be looking at certain photographs, DNA traces, weapons and tools, and also certain documents.
Accountants are becoming a needed job in the business industry and play a very important role in the success of many businesses. This job usually requires at least a bachelor’s degree in accounting and sometimes even a CPA (Certified Public Accountant). There are many other things that are needed to be considered before choosing this career. The job environment, education, skills, and benefits are just some of the many things that need to be thought through before considering this career.
Accounting is one of the fastest growing fields in the United States It expands each time a new store, a factory, a filling station, or a school goes up, whether in a large city or a small town. In today's society, the demand for good accountants for exceeds the supply. As our country has expanded, business and industry have become more and more complex, so control here is very important. And control depends on a great deal of the bookkeepers and accountants who can analyze figues and advise management on what should be done. They are using more scientific ways changing money, figuring change, and collecting sales taxes. Moreover, department stores and other companies now have plants and offices widely scattered throughout the country. A new set of bookkeepers and accountants, is needed at each branch. I know there are many managements supervisory, and junior or senior executive positions are bing filled by people who started as accountants because accountants have the knowledge of methods and finance and comprehension of the fundamentals of business, and acc...