Using Teams in Production and Operations Management:
Forensic Accountants: Fraud Busters.
Class: Bus 508:
Date: 13 November 2012
Abstract: A case study for the Strayer University, Woodbridge, VA, Business 508 class, this paper provides for a brief review of 1) The skills that a forensic accountant requires; 2) The role of the forensic accountant in the courtroom; 3) The legal responsibilities of the forensic accountant; and lastly, 4) The role of the forensic accountant in a couple of major accounting fraud scandals.
The world of Accounting has seen several major scandals since the early 1990s. These include major accounting failures ...view middle of the document...
In 2011, a definition in Accountancy Ireland, noted: “Forensic accounting has been defined as "the science of gathering and presenting financial information in a form that will be accepted by a court of jurisprudence against perpetrators of economic crimes". The field integrates accounting, auditing and investigative competences to detect and prevent financial irregularities in business. (Idowa, 2011). As the field grows, this definition and information will continue to evolve.
But what are the skills that the Forensic Account requires? d’Ath (2008) notes them as including the following: 1) Thoroughness, 2) Curiosity, 3) Creativity, 4) Credibility, 5) Being articulate, 6) Awareness of laws and regulations. Others include things such as: a disbelief that the numbers as presented are correct – almost an inherent belief that they are hiding something. As noted by Crumbley and Apostolou (2005), Robert Roche describes a forensic accountant as someone “who can look behind the façade—not accept the records at their face value—someone who has a suspicious mind that [considers that] the documents he or she is looking at may not be what they purport to be and someone who has the expertise to go out and conduct very detailed interviews of individuals to develop the truth, especially if some are presumed to be lying.” Forensic accounting often involves an exhaustive, detailed effort to penetrate concealment tactics. Not really a very trusting fellow.
But what does a forensic account need to know? Well in the United States, he or she should be well versed in accounting, possibly even a CPA; have some legal training, especially in the various privacy laws: Fair Credit Reporting Act (FCRA), Health Insurance Portability and Accountability Act (HIPAA), the Privacy Act of 1974, the Family Educational Rights to Privacy Act (FERPA), and the Electronic Communications Privacy Act (ECPA). He or she should also have a background in computer sciences with knowledge of Advance Information Systems (AIS). The need to examine not only paper files but also computer files and communications all require background in the noted areas. There are certifications available for the forensic accountant. They are the CrFA – Certified Forensic Accountant and the CFAP – Certified Forensic Accounting Professional. What does the legal side of this profession look like?
The Forensic Account in the Courtroom and in your Business
They also need to be above reproach in their knowledge and ethics as they may be called to testify as an expert witness in court cases. They must be able to talk about and explain complex financial data and calculations to a judge or a group of individuals “off the street” who have no knowledge or background in most of the noted fields. Per Curtis (2005), as far as lawyers are concerned forensic accounting is the application of accounting tasks for an evidentiary purpose.
It has been defined with greater precision as ‘‘the action of...