————————————————- spotlight on this increasing — or perhaps
————————————————- Forensic Accounting and the use of technology: The Toronto Sun October 4, 2009 Sunday FINAL EDITION Investigate the world of forensic accounting BYLINE: BY SHARON ASCHAIEK, SPECIAL TO SUN MEDIA SECTION: NEWS; Pg. CE11 LENGTH: 733 words Lately, cooking the books seems to be a national pastime in some corners of North American corporate culture.Over the last several years, Canadians and Americans have witnessed a rash of accounting and financial fraud incidents, including the debacles at now-bankrupt WorldCom and Enron, the Martha Stewart stock scandal, and recently, the largest Ponzi scheme in history allegedly perpetrated by Bernard Madoff. One effect of the stronger public spotlight on this increasing — or perhaps just increasingly detected and prosecuted — white collar crime is greater demand for qualified forensic accountants, and consequently, an increase in both the number and popularity of programs or courses in this area.
There is an exponentially greater level of attention being paid to the world of fraud, and I think that’s why our enrolment is up,” says Cameron McCaw, instructor in the Fraud Investigation and Forensic Accounting program at Seneca College. Typically attracting about 15 to 18 students per intake, the two-semester graduate certificate program drew about 30 students this past fall. Introduced about six years ago and, according to McCaw, was the first of its kind in Ontario, the program provides students with in-depth training in uncovering fraud, financial disputes and other such irregularities in today’s business world.Participants gain technical skills and practical knowledge in fraud investigation, law and ethics, and computer and systems technology.
“We take high-profile cases of fraud and financial wrongdoing, such as Bernie Madoff, Conrad Black and Garth Drabinsky, and we ask: Why did it occur? Where did the system break down? What can we learn from it? ” McCaw says. “Forensic accounting is about asking the right questions, applying the right level of cynicism or skepticism when you hear answers, and using intuition to drill down to find out what doesn’t make sense, and to find the evidence to support it. Courses in the program include Computer Forensics and Data Mining, Financial Statement Fraud, Money Laundering and Asset Tracking, and Serving as an Expert Witness/Communication.
Students gain first-hand insights on the field from guest speakers such as retired RCMP officers, police officers, lawyers, and IT professionals specializing in forensic accounting technology. To qualify to participate, individuals have to have completed a degree or three-year diploma in a related business area, or be a mature student with three years of documented work experience in a related field.Graduates are prepared to work as fraud examiners and forensic accounting investigators with public accounting firms; financial institutions such as banks, insurance firms and credit card companies; government agencies; financial regulators; the internal auditing departments of companies; or, in law enforcement. “This program is very responsive to this trend and to the marketplace, and it prepares students for a host of job opportunities,” McCaw says.
“Students come away with a strong foundation and employers find them to be very prepared and well trained. Brand new this fall at Humber College, meanwhile, is Forensic Accounting, an online course that covers various aspects of financial fraud, including fraud prevention, detection and investigation. Legal procedures related to fraud, statistical analysis for fraud detection and fraud investigation reporting are among the main subjects covered in the course.
Teaching the course is a seasoned industry expert with 30 years of experience in computer auditing and information security in both the private and public sectors. Taking this course makes a student more marketable as an accountant or auditor and helps them start a career as a forensic accountant,” says Guillermo Acosta, director of professional and continuing education at The Business School at Humber College. “It also prepares the student to write the Certified Fraud Examiner (CFE) examination, a well-recognized designation that is almost a ‘must-have’ for those who want to be a full-time forensic accountant in a large organization. ” Accepting a maximum of 40 students per intake, the course is rich in practical training and prepares students to adapt to the growing trend of corporate responsibility. ———————————————— Says Acosta: “This is an excellent learning opportunity, and the skills students will gain will support new policies that are emerging in corporate governance.
” Sydney Morning Herald (Australia) September 5, 2009 Saturday First Edition A new breed of crime stopper; Postgraduate study BYLINE: Megan Johnston SECTION: SUPPLEMENT; Pg. 14 LENGTH: 806 words Financial investigators are in great demand in the wake of recent global events, writes Megan Johnston. Forensics conjures up crime scenes and cadavers.For accountants, however, digging up corporate corpses is the less grisly reality.
While company collapses and fraud capture most of the media attention, financial investigators follow all sorts of paper trails, gathering evidence to be used in court or legal disputes. The field is nothing new but a new breed of experts and boutique firms is emerging, specially equipped to tackle an increasingly complex business world. The University of Wollongong’s master of forensic accounting arose five years ago after compliance regulations failed to prevent a string of big corporate collapses. a€?Forensic accounting looks beyond the numbers to identify red flags that may indicate a company is at risk,a€ the school of accounting and finance’s Kathie Cooper says.
The university’s masters program teaches accountants, tax specialists, bankers and law enforcement workers about investigation techniques, computer forensics, money laundering and tax evasion. Good forensics experts always keep an open mind, the faculty of law’s Judith Marychurch says. a€? They’ve got to go in looking for things, asking ‘where do I need to start, how do I know I’m seeing something that is a potential problem and what do I do to follow that through? a€ she says. Her students go on to work for accounting firms, lawyers, courts or private clients. Others work for police, banks and regulatory bodies. Some universities are heading in this direction by introducing elements of forensics into their courses.
The associate head of accounting at the Australian School of Business at the University of NSW, Peter Roebuck, says his institution plans to teach forensics to postgraduate IT students next year. a€? Forensics has been around a while but now everybody’s focused on it because of what’s happening in the finance world,a€ he says.Deakin University’s new graduate certificate of commercial law in financial crime control is aimed at lawyers, compliance officers and auditors.
The institution’s chair of law, Louis de Koker, says companies are moving to protect themselves against financial crime such as fraud, money laundering and terrorism funding. a€? It’s clear that businesses ..
. require resources, they need people with an understanding of the phenomenon,a€ he says. The head of audit at the Institute of Chartered Accountants, Andrew Stringer, says Australia has the field’s first professional standard, which codifies the job. €? People are trying to learn lessons and see where we can do better next time,a€ he says. FOLLOW THE PAPER TRAIL THERE is more to forensics than fraud for Matthew Gwynne. As a partner in the forensic division of Vincents accounting firm, he also investigates civil matters, whether they be insurance, business valuations or family and commercial disputes.
“Fraud is only one part of what we get involved in,” he says. “It could involve a couple who are divorcing and there’s a business involved and they need to put a value on it. Or two companies contracted to provide services and there’s a breach of that service a€” we would be engaged to assess the dollar value of that damage as a result of that breach. ” Gwynne writes reports from his findings, which can be admitted to court. He can even be called as a witness to give expert opinion or be cross-examined. Some jobs are more complex than others, especially covert investigations involving overseas bank accounts a€” which is when computer specialists are called in to conduct searches or see whether documents have been destroyed.Gwynne’s interest in forensics was piqued about 10 years ago while working in family law and a few years later he took up postgraduate forensic studies at Monash University via distance education.
Despite this expertise, he still relies heavily on his conventional accounting skills. “First and foremost, I’m a chartered accountant and I have a variety of different skills such as auditing, general business advisory and taxation and corporate advisory,” he says. “Forensic accounting takes it one further step and … over the years, there’s so many different people and business and matters you get involved in. It never gets boring.
MJ A range of options University of Wollongong Master of forensic accounting. Deakin University Graduate certificate of commercial law (financial crime control). Monash University Graduate certificate in forensic studies (accounting). Queensland University of Technology Master of business (accounting). University of Southern Queensland Master of business (business forensics specialisation). Charles Sturt University Masters, graduate diploma and graduate certificate (fraud and financial investigation). ————————————————- La Trobe University Graduate certificate in fraud investigation.
http://www. cpa2biz. om/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2008/CPA/June/Role. jsp The Forensic Accountant’s Evolving Role With the proliferation of crime programs on television, the layperson might be led to believe that forensics is synonymous with criminal investigation or something morbid. In fact, we are invariably asked, as forensic accountants, if we count dead bodies. According to Wikipedia, the adjective “forensic” refers to something “of, pertaining to or used in a court of law. ” However, in practice, forensic typically refers to the method of obtaining evidence related to any investigation, not just a crime or legal matter.
In the latter context, the forensic financial expert investigates and analyzes financial evidence with the goal to provide expert testimony on financial damages for parties in litigation. Background The role of the forensic accountant has expanded significantly during the last several years for many reasons, including the requirement for greater scrutiny on corporate governance brought about by the Sarbanes-Oxley legislation and the widespread recognition of the risks and prevalence of financial fraud in today’s business environment.As a result, forensic financial specialists are usually retained to support special investigations related to a broad range of subjects. This can include the financial impact of marketplace events, such as intellectual property infringement and anti-trust actions, financial reporting fraud, asset impairment and business valuation. These investigations occur in contexts such as civil litigation, alternative dispute resolution, insurance claim adjustment, internal fraud investigation, securities class action and internal corporate investigations.The questions posed to the forensic financial expert are increasingly more complex, requiring skill sets beyond a typical understanding of financial records and Generally Accepted Accounting Principles (GAAP).
Knowledge of forensic accounting is only part of the equation. More often, a team of forensic financial specialists with a variety of skill sets is needed to address the many challenges posed by a case.For example, the logistics of finding data in numerous locations such as tape drives, personal computers and BlackBerry wireless devices require forensic technology specialists who are familiar with electronic data systems and who can identify and ferret through electronic storage devices to find case critical documents. An allegation of market manipulation often requires an understanding of economics, finance and how financial investment firms operate to fully document issues of causation and actual loss sustained. Permanent impairment of a company’s value due to an alleged act will necessitate the use of accepted valuation skills.This complexity has created a need for a multidisciplinary profession of “Financial Forensic Experts” who are proficient in accounting, finance, economics, computer technology, statistics, valuation and legal processes.
Specific industry expertise is also an important element in the equation, making this team a group of highly-specialized experts indeed. The investigative forensic team rarely has access to all of the relevant information related to a case. Therefore the ability of the team to respond with absolute certainty is not always possible.Manipulation of records, destruction of evidence, time limitations on completing the investigation and restrictions imposed by the litigation investigative process by the parties involved are some of the reasons that certain data cannot be found. With this in mind, the forensic team must utilize a number of skills and techniques to reconstruct or uncover the facts. As many damage calculations require construction of a theoretic reality “but for the event,” the team must also be adept at working through the facts and a hypothetical situation as if no damage event occurred.
Resources The Forensic and Valuation Services section of the AICPA published a Special Report in 2006 that provides a comprehensive discussion of forensic techniques. Further, the report provides a useful comparison of Generally Accepted Auditing Standards (GAAS) audit evidence with Forensic Procedure Evidence. While a good reference with regard to forensic accounting skills, it is important to remember that it includes seven forensic investigative techniques and discusses each in detail. It also discusses how forensic procedures differ from audit procedures.
While both the auditor and the forensic investigator review written or electronic documentation and interview certain key personnel, the similarity between their jobs ends there. In the case of an auditor, his or her work is that of attestation and related to historic facts used to draw conclusions about GAAP accounting and ultimately, the fair presentation of a company’s financial position. In the case of a forensic investigator, his or her work is often about what did not get recorded, was hidden, deleted or would have happened in the theoretic reality.As such, tasks are uniquely employed to the facts and circumstances of each case depending upon the nature of the inquiry and the accessibility of the relevant data. The forensic investigator must shape an opinion from available facts knowing that every situation is different and that there is no “one way” to determine the next step through the maze.
Often, the next step requires a specific skill of another team member to accomplish the project. For example, in cases of suspected fraudulent market trading, the forensic investigator may be restricted in his ability to question the suspected fraudster.However, he may have unfettered access to pertinent documentation.
The investigator’s familiarity with specialized trading policies in the financial markets, as well as market trends, will be important replacements to the information that might have been provided in an interview. In another example, access to documentation and key employees is often controlled and filtered by the discovery process in cases involving a permanent diminution in value of a business. A standard lost profits calculation for damages will likely not be an adequate substitute for a full professional understanding of financial valuation.
Conclusion ————————————————- The complexity of the financial issues posed in litigation and forensic investigations requires a very broad, multidisciplinary approach to the investigative and damage calculation phases of the legal process. The new professional field of financial forensics and the variety of experts that fill this bill provide corporations and attorneys with the tools required to respond to complex litigation and dispute resolution. ————————————————- http://www. wisegeek. com/what-is-forensic-accounting.
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