The Use Of The Financial Investigation Method

Werle used Digital Analysis technique to uncover this fraud. She conducted computerized analytical review. She also conducted in depth research to investigate irregular activities and contracts that could have been entered in to by

A case study is “a method of analysis and a specific research design for examining a problem” (University of Southern California, 2010). It can be used to analyze a person, place, event, or other subjects in order to help discover mitigating issues, misconceptions, failures, trends, or recommendations (USC, 2010). Case studies will be used to gain a better understanding of situations and topics to help others make better policies, procedures, and decisions (USC, 2010).

A case study is a puzzle that has to be solved. The first thing to remember about writing a case study is that the case should have a problem for the readers to solve. The case should have enough information in it that readers can understand what the problem is and, after thinking about it and analyzing the information; the readers should be able to come up with a proposed solution. Writing an interesting case study is a bit like writing a detective story. You want to keep your readers very interested in the situation.

Professional auditing standards discuss the three key “conditions” that are typically present when a financial fraud occurs and identify a lengthy list of “fraud risk factors.”

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.

Although every investigation case is unique, the investigation process is similar for most cases and usually consists of four stages:  Goal Setting, Planning, Investigation and Evaluation. The investigation process starts with goal setting. Goal Setting sets the expectation and identifies the complainant’s goals as well as obtainable results and acceptable outcomes. “The effectiveness of every fraud investigator, in pursuing either criminal or civil fraud investigations, is ultimately judged by how closely—and consistently—she reaches or exceeds her investigative goals.”

This subject company in this case study is WoolEx Mills. The top management team at the Mills had to act fast to prevent the accusations charged upon them, so that they may venture deep into the United States market. In the process, they had to act in a way that will present the company’s financial statements; cash flows in a way that they did not show any suspicious fraudulent activities. The type of fraud in this case study is known as manipulation of accounts which involves the act of offering the accounts in the way they are not in reality.

During a fraud examination process. I would start by reviewing pay rates of the 125 employees in the company. Examine payments made to employees and payments made to vendors, then vendor invoices and match vendor invoices with contracts. See who is signing the vendor contracts. Review the internal controls policies of the company and read upon who should be the one signing off on the vendor contracts. The person handling the vendor contracts can be asked to take vacations. Then, monitor the incoming and outgoing wire payments from the company’s banking

The law of fraud is stretched across the justice and regulatory systems. It covers many different scenarios and grants numerous agencies powers to investigate diverse types of conduct varying in seriousness, from false accounting or fraudulent trading, to sophisticated commercial crime cases involving vast amounts of funds across multiple jurisdictions.

According to Daniel F. Dooley (2008), a member of the Commercial Fraud Taskforce, financial fraud with private middle-market companies is on the rise. In fact, Mr. Dooley believes that he has seen more instances of fraud in the past two years than in the previous ten. He notes seven areas in which financial fraud has increased over the past few years:

Fraud examiners use interview techniques to achieve investigation objectives, obtain evidence and abide the legal aspects pertaining to a case. Investigation objectives are important to be analyzed as it outlines the links of the investigation. Understanding investigation objectives assists in understanding the gaps of the investigation and the strategies that must be implemented. Further investigations are needed when investigating a case to understand fact from fiction and compare any inconsistencies. Interview techniques are strategic procedures that focus on several factors prior to an interview by outlining the interview’s purpose, types of questions, the setting and establishing rapport with the interviewee.

The auditing firm has been in engagement with the company throughout the period when the fraud was being committed. One of the common and clear indicators of possible fraud was the company’s cash flow statement. The company experienced positive growth in its profits from the year 1996 through to the year 1998. However, a close analysis of the cash flow statement shows that the company had experienced negative figures of cash flow from both operating and investing activities and positive cash flow from financing activities which would not sufficiently offset the negative cash flows from operating and investing. It is therefore evident

Dane Striker recently joined in Nirvana Forensics Agency. He is a Certified Fraud Examiner (CFE), Certified in Financial Forensics (CFF) & preparing to attend the Certified Public Accountant (CPA) exam. He used to work as a freelance Forensic Accountant & successfully investigated some fraud cases in different reputed company. He prefers to work in production oriented sensitive business environment & like to detect embezzlement, fraud & intensive data analysis.

On the onset of her fraud, investigation is important to properly coordinate how the investigation will unfold. Discretion upon everyone involved is most important right from the start. This is to make sure that individuals committing the fraud are not made aware that an investigation is taking place. The reason this is so important is that they continue to operate thinking everything is still going undetected. As a team is assembled to conduct the investigation, each member must be aware of the importance of operating in a stealth manner at all times. If at all possible, a public announcement should not be made, as it will only help the individuals perpetrating the fraud to potentially destroy evidence that can be used against them at a future date.

This is more difficult than it may seem due to the fact that this type of investigation usually involves a number of people and parts (with some of the people involved being completely unaware of their involvement in a scam). The first step is determining