FORENSIC ACCOUNTING ACCT 587 Spring 2013

Professors: Doug Farrow, Jim Dowling, Omid Yazdi Section: 14297D Phone: (213) 955-8389 , (626) 585-0321 and (213) 430-2119 Class Meetings: M 6:30-9:30 p.m. Email: dfarrow@kpmg.com, jim@dowlingadvisory.com, oyazdi@kpmg.com, Location: 230 Office: 205 Credits: 3 Office Hours: M 5:30 6:30 pm Prerequisite: ACCT 572 prerequisite may be waived.

Required Text and Readings: Forensic Accounting and Fraud Examination (1st Ed) by Kranacher, Riley and Wells, 2011. Managing the Risk of Fraud and Misconduct: Meeting the Challenges of a Global, Regulated, and Digital Environment by Girgenti and Hedley, 2011. Various class handouts, including PowerPoints, supplementary resources, cases, problems, examination materials, etc. Note all such material is copyrighted and may not be reproduced, distributed, or displayed without express written consent of the author.

Please bring the texts to each class as we will use discussion cases in the text. Texts are available through Amazon.com. The USC bookstore may not be able to provide these texts because of timing issues. USC Information: USC Emergencies (213) 740-4321 USC Emergency Info Line (213) 740-9233 KUSC Radio 91.5 FM USC Information Line (213) 740-2311

Important Dates: Spring semester classes begin MLK Day, University Holiday Last day to drop without a mark of W Presidents Day Midterm Exam Spring Recess Investigation Report/Presentations Last day to drop with a mark of W Expert Witness Report/Presentations Rebuttal Report Due Final Exam Monday, January 14th Monday, January 21st Tuesday, February 5th Monday, February 18th Monday, February 25th March 18th March 23rd Monday, March 25th Friday, April 12th Monday, April 22nd Monday, April 29th (beginning of class) Monday, May 13th (7-9:30 p.m.)

Course Audience, Objectives and Outcomes:

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ACCT 587 is for graduate students interested in the growing field of forensic accounting. Forensic accounting continues to grow in complexity and significance as does the need for accountants with the special tools and analytical abilities to decipher complex financial matters, including fraud and misconduct. The course requires that you have at least some familiarity with other areas of accounting, especially financial accounting and auditing with some understanding of systems. A strong financial and auditing background would be very helpful. We will cover a wide variety of disciplines within the field, including but not limited to, fraud and misconduct investigations, cybercrime, valuations, damage calculations and litigation support. Through various discussions, lectures, cases, group projects and guest speakers, we will learn the basic concepts and attain the technical knowledge that can be expected of a first year forensic accountant as well as apply such theories and methods to real world disputes. Students will, by the conclusion of the course, meet the following learning objectives: 1. Explain the role and responsibilities of the forensic accountant and the types of engagements typically involved in the field 2. Describe typical fraud schemes and how to prevent, detect and respond to them 3. Use analytical and investigative tools and techniques for conducting a forensic investigation and communicating their results 4. Calculate the basic components of economic damages 5. Develop an expert report and prepare for expert testimony 6. Discuss real world matters involving forensic accounting Graduate Program student learning objectives have been developed by the USC Leventhal faculty and administration and have been filed with the AACSB, the accrediting body for accounting and business schools. In addition to the above course learning objectives, this course will focus on the following learning outcomes of the graduate programs: 1. Technical, Conceptual, Problem-Solving Requirement: Students will be competent in and be able to apply discipline-specific knowledge and skills in the fields of accounting or taxation. This learning outcome includes the development of critical thinking and problem solving skills, as well as an understanding of the strategic role of accounting in business organizations and society. 2. Professional Development Requirement: Students will be able to communicate clearly, and strategically, after considering the relevant audience, situation, and purpose of the communication. Students will develop the ability to work productively with others to accomplish established goals. 3. Ethical Principles and Professional Standards Requirement: Students will be able to apply ethical principles and professional standards in analyzing situations and making informed decisions. The class will incorporate a blend of academic and real world situations. We have invited guest speakers that make extensive use forensic accountants in conducting investigations and/or litigating disputes. They will discuss specific situations and how forensic accountants are used.

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Grading: Grading components and relative weights are as follows: Grading Component Participation Homework Assignments Midterm Exam Investigation Report/Presentation Expert Witness Report/Presentation Rebuttal Report Final Exam % of Points Total Possible 10% 100 5% 50 15% 150 20% 200 20% 200 15% 150 15% 150 Total 100% 1,000

Overall grades are based on a rank ordering of points accumulated during the course of the semester and will adhere to the USC Leventhal School of Accounting and Marshall School of Business grading standards for graduate programs. Typically overall course grades for this type of course would result in a class average 3.5 GPA. Topics and Assignments: A course schedule is attached to the syllabus. It includes course coverage on a weekly basis together with exam and other important dates throughout the semester. Please note that this syllabus and assigned readings are subject to change. The field of forensic accounting requires that you deal with constant change and uncertainty and our class will incorporate aspects of this uncertainty. Changes will be indicated on Blackboard and an updated course schedule will be posted. You are required to check the contents of the Content Folder at the conclusion of each week to determine course coverage, readings, assignments, guests, etc. for the upcoming week. In the absence of any changes indicated on Blackboard, follow the attached course schedule. Any updates, as well as all course-related information, will be posted on the Course Information folder and should be available by Friday for the coming week. For all types of graded material, late work will not receive full credit. Homework Short Case Studies: These write ups are assigned to facilitate discussion in a particular topic area. You are expected to address the issues and consider the implications for these short case write-ups. They should be done in outline or bullet form. As a general rule, these short case write-ups will be graded based on effort extended, thought, and issues identified to help facilitate discussion. Specific instructions will be posted on Blackboard for each of these assignments. Class Participation and Professionalism:

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In addition to the case write ups, there will be class discussion of cases, both assigned in homework and in the news. Students should come to class prepared to discuss current events as they relate to forensic accounting. Participation points are awarded primarily for substantive contributions to class discussions. Participation in class discussions should enhance and further the learning experience of the members of the class. Attendance will also be considered in participation points. Class attendance will be tracked by an attendance sheet. It is your responsibility to sign in for each class session that you attend. You are welcome to review the sheet at the end of each class session to determine whether you have properly signed in. On-time arrival and remaining until the end of class are required for full attendance credit. Midterm Exam: The midterm exam will consist of multiple-choice questions and short essays. The exam will be based on the material covered in readings, lectures, guest speakers and class discussions. There will be questions based on material covered in the lectures that is not available in the text. The midterm exam is scheduled for Monday, February 25th at the beginning of class. Investigation Report and Presentation: The class will be divided into groups. Each group will be provided materials for the case study, including business background information, financial statement information and data, and sample results of investigation procedures. Your group assignment will be to analyze the investigation procedures undertaken and their results and prepare a report to the clients audit committee of your findings, next steps and recommendations. As a group, you will be asked to give a presentation on your report. You will receive materials and more details including deliverables during class. The presentations are scheduled for Monday, March 25th. Expert Witness Report and Presentation: The class will be divided into groups and each group will be provided materials for a case. Groups will be assigned as experts for either the defense or the plaintiff. Your group assignment will be to analyze the information and write a Rule 26 expert report for your assigned client. The expert report will incorporate any relevant issues, topics, and/or calculations covered throughout the course. As a group, you will be asked to give a presentation on your report. The goal of the report is to provide the strongest argument possible for your client without losing credibility as an expert. Keep in mind that there will not be a perfect answer. As an expert, you will be relied upon to provide an answer based on your professional judgment. Rule 26 reports and the forensic accountants role will be discussed in more detail in class. The due date for reports will be Monday, April 22nd at the beginning of class. Rebuttal Report: The class will remain in the groups assigned to the Expert Witness Report. The goal of each group will be to rebut the perspective from the other side. Groups will have to detect and expose miscalculations, inconsistencies, and unusual assumptions. The due date for reports will be Monday, April 29th at the beginning of class; there will be no presentation pertaining to the Rebuttal Report.

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Final Exam: The final exam will consist of multiple-choice questions. The exam will be based on the cumulative material covered in readings, lectures, guest speakers and class discussions. There will be questions based on material covered in the lectures that is not available in the text. The final exam will also cover key topics discussed in the recommended readings. The final exam is scheduled for Monday, May 13th from 7:00-9:00 p.m. Exam Make-Ups: Make-up exams will be given only in what the instructors determine to be extraordinary circumstances, justified by a legitimate excuse and supported by appropriate and adequate documentation. We will make every effort to schedule an opportunity to make up an exam that is properly justified. Should a student miss the midterm, the instructors reserve the right to allow the final examination to count for the combined weight of the midterm and final examination. Peer Evaluations: This class depends heavily on group work. It is important that group members participate and contribute to the overall effective delivery of group assignments. In order to measure effective participation, you will be asked to prepare peer evaluations on each of your group members. These evaluations will cover all major assignments and will be used to adjust individual grades based on performance. Retention of Graded Materials: Final exams and other graded work which affected the course grade will be retained for one year and available for review after the end of the course. Statement on Academic Integrity: USC seeks to maintain an optimal leaning environment. General principles of academic honesty include the concept of respect for the intellectual property of others, the expectation that individual work will be submitted unless otherwise allowed by an instructor, and the obligations both to protect ones own academic work from misuse by others as well as to avoid using anothers work as ones own. All students are expected to understand and abide by these principles. Students taking this course are held to the standards of the USC Leventhal Student Honor Code as well as University rules. Scampus, the Student Guidebook, contains the Student Conduct Code in Section 11.00, while the recommended sanctions are located in Appendix A: http://www.usc.edu/dept/publications/SCAMUS/gov/. Students will be referred to the Leventhal Student Honor Council and to the USC Office of Student Judicial Affairs and Community Standards for further review should there be any suspicion of academic dishonesty. The Review process can be found at: http://www.usc.edu/student-affairs/SJACS/. Statement for Students with Disabilities: Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations should be obtained from DSP. Please be sure the letter is delivered to one of the Page | 5

professors as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. - 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.

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