Forensic Accounting as it relates to fraud Essay

3314 Words14 Pages
Fraud 12 Forensic Accounting as it Relates to Fraud February 20, 2014 Abstract The field of Forensic Accounting has seen a remarkable growth in the last decade. This growth is due in part to the many high profile accounting scandals like Enron, Arthur Anderson, and Bernie Madoff investments (Shinde & Poznic, 2010, p. 1). This paper intends to highlight the effect that forensic accountants has on fraud cases, specifically securities fraud. According to the Merriam Webster dictionary fraud is defined as “an act of deceiving or misrepresenting.” This paper is meant to address how the ineffectiveness of forensic accountants can lead to them being held legally liable for their client’s…show more content…
An investigator can also be liable if the contract is breached. Breach of contract can result if an investigator promises a client a specific document at a specific time, if that deadline is not reached by the investigator the contract is breached (Ehrlich & Williams, 2013). In the article “Criminal Liability of CPAs in Federal Securities Fraud and Tax Cases” the author states that “In breach of contract cases, fault and state of mind are irrelevant. A CPA’s engagement letter is a contract. She might have tried in good faith and made every effort to perform, but damages must be paid upon breach of contact if she has broken a promise. This broken promise alone results in liability.” (Ehrlich & Williams, 2013, p. 62) This means that a CPA can do their job to the best of their abilities, and if the best of their abilities does not meet the standard of the contract, the contract has been breached. Liability does not have to intentional, it can be unintentional and unforced, but like it’s said if the work is not up to standard then the contact has been breached. Malpractice Investigators must thoroughly go through each financial document that they are investigating. Failure to do so will result in charges being brought against the investigator for malpractice. Malpractice cases usually go before a civil court where the standard is lower and cases are easier to prove (Ehrlich & Williams, 2013). Authors Ehrlich & Williams (2013)
Get Access