Financial Crimes

Throughout history and in our own time, legitimate accounting methods have been utilized to fraudulently engage in manipulating activities that results in illicit gains to the perpetrators and losses to individuals and financial institutions.

ranging from skimming to hacking into some ones iCloud. We will also be giving examples of to

In fraud committed against organizations, the victim of fraud is the employee’s organization. In frauds committed on behalf of an organization, executives usually are involved in some type of financial statement fraud; typically, to make the company’s reported financial results appear better than they actually are. In this second case, the victims are investors in the company’s stock. A third way to classify frauds is via the use of the ACFE’s occupational fraud definition, “the use of one’s occupation for personnel enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets” (ACFE, 2010). The ACFE includes three major categories of occupational fraud: asset misappropriations involves the theft or misuse of the organization’s assets, corruption involves the wrongful use of influence in a business transaction in order to procure benefits contrary to their duty to their employer, and fraudulent financial statements involving falsification of an organization’s financial statements for personal gain.

In this course, students are introduced to the conduct of fraud examinations, including a discussion of specific procedures used in forensic accounting examinations and the reasoning behind these procedures. Topics include an overview of fraud and abuse, forensic evidence, substantive procedures for cash outflow irregularities, substantive procedures for asset irregularities, financial statement fraud, and examination reporting.

Dr. Kelly Richmond Pope is an associate professor for the School of Accountancy and MIS at DePaul University in Chicago, Illinois. In completing her collegiate career, she obtained a bachelor's degree from North Carolina A&T State University in accounting. Further, Dr. Pope received her doctorate's degree in accounting from Virginia Tech. She was employed by KPMG, LLP practicing forensic accounting. Several cases Dr. Pope has worked on included insurance fraud investigations, fraud risk management jobs, and anti-money laundering engagements. In addition, she co-authored a book, The A.B.C.’s of Behavioral Forensics: Using Psychology to Prevent, Detect, and Deter Fraud.

AICPA Code of Professional Conduct principles prevents vises such as fraud that are experienced in accountancy field. Audit is the best measure of the effect of the fraud that are imposed to investors by accountants. The relationship of the investors and account holders are supposed to be affirmed through auditing to ensure accounting principles are upheld(Weirich, Pearson, & Churyk, 2010). Improper loss of the funds through propagation of the accountant officer should be treated as fraud and criminal activity that should lead to prosecution. Therefore, the paper seeks to relate two fraud cases that have been audited and presenting AICPA Code of

Computers are common tools used by the culprits behind white-collar crimes. In order to find “culprits,” the forensic accountant will need to be able to dig deep into the company’s computer system. However, without the proper equipment, that process can prove to be very difficult. To facilitate the preservation, collection, analysis, and documentation of evidence, forensic accountants can use specialized software and computer hardware.

In the present day forensic accounting plays a huge role in many of the court cases publicized by the media. With the spotlight on the profession, this is a good opportunity to discuss the following topics:

A study conducted by the Association of Certified Fraud Examiners (ACFE) surveyed 959 cases of reported occupational fraud between 2006 and 2008. The report broke fraud into three categories: fraudulent statements, asset misappropriation, and corruption. Ninety-nine of the 959 cases reported financial statement fraud with a median loss of two million dollars, making it the most costly of the fraud categories. In general, the study found that publicly traded companies that had implemented SOX controls reported fewer losses (70 to 96 percent) than those who had not implemented SOX controls. These results imply that implementation of SOX controls are directly related to a reduction in theft and other fraudulent behaviors. Surprisingly, it was noticed that in companies where management must certify the financial statements, fraud took approximately three months longer to detect than in those companies where management was not required to certify the financial statements. However, due to the complexity and relative newness of SOX and the complexity of the businesses and the ingenuity of people, it is not surprising that SOX has not been a booming success. Hopefully, over time, all the wrinkles will be ironed out allowing for deterrence or immediate detection to be attainable. (Rappeport,

Forensic accounting is a type of accounting which unites investigation accounting and litigation support to provide an accounting analysis that is suitable for court.

Fraudulent, erroneous, and illegal acts committed by a public company, usually at a managerial or executive level, have been a very serious problem for many years and have prompted development of strict and updated regulations, such as the Sarbanes-Oxley Act, in an attempt to prevent these occurrences. Unfortunately, these new or updated regulations are not enough to prevent these acts from happening, thus not alleviating the auditors of their responsibility to detect fraud. Some methods that management and auditors can employ to prevent and detect fraud, errors, and illegal acts are: improving knowledge, improving skills,

Forensic accounting is the use of investigative and analytical skills for the purpose of resolving financial issues in a court of law. Forensic accountants need skills in accounting, auditing, finance, quantitative methods, certain areas of laws, research and investigative skills to collect, analyze and

Forensic accounting is defined as "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 using such past financial data for projecting future financial data to settle legal disputes". Forensic accountant are very important part of the business for the expert services, legal system such as financial statement analysis on securities and exchange tax, fraud schemes and bankruptcy. However forensic accounting is used for the investigation and prosecution of fraud. (Curtis, 2008) Said, that accounting curriculum needs to be upgraded because accounting professionals or accountants are key player in account management and financial management. Accountants are involved in accounting practices and fraudulent activities therefore there is need for forensic accounting curriculum. Curriculum plays a major role in accountant 's professional life because what they learn during their studies, they execute it as well.

Forensic accounting covers two broad areas: litigation support and investigative accounting. The AICPA describes litigation service as "any professional assistance non-lawyers provide to lawyers in the litigation process." Forensic science may be defined as the application of the laws of nature to the laws of man. Forensic accounting is accounting that is suitable for legal review, offering the highest level of assurance, and is of a scientific nature. Forensic accounting should be sufficiently thorough and complete so that an accountant, in his/her considered independent

Over a long period of time, corruption has been the focal point of every government, media and academics globally. Through money laundering, proceeds of crime can be disguised. Proceeds of crime can simply be put as money earned from profit-oriented crime. The methods used are many and highly complicated. Corruption is one of the organised crime which is said to be primarily associated with the laundering of proceeds through money laundering. Technological tools accord further chances for individuals to employ money laundering as a process of ‘cleaning up’ dirty money and obscure the trail leading back to the underlying crime.