Professional Documents
Culture Documents
Accounting
Agenda
• Definition
• History
• Skills
• Business scandals
• Cases
Forensic Accounting
Situation
A client was experiencing an unexplainable decline in profits. The Chief Financial
Officer was suspected of embezzling corporate funds, so the client hired forensic
accountant and investigative team to look into the situation.
Solution
By analyzing the company's financial statements and records and uncovered a large
fraud scheme. From available documents and records, and from interviews with key
employees, a fraud report revealed that the CFO's fraudulent activities. The primary
suspect was interviewed and confessed. The client is assisted in filing an employee
dishonesty claim, and further assisted law enforcement in the prosecution process.
Results
- Chief financial officer gave a written confession and was then fired. The case was
turned over to law enforcement and charges were filed by the local prosecutor.
- New chief financial officer was hired.
- Company is experiencing increased profits.
Inventory Losses Case Study
Situation
A large recreational wholesaler was experiencing significant inventory losses, a high
number of customer complaints and a loss in revenue in the warehouse department.
They decided to bring in an independent forensic team.
Solution
After meeting with the company's executives, the team of forensic investigators
determined the company needed to proceed with some investigative work. Covert
surveillance is conducted of the warehouse department, onsite interviews of
warehouse employees, and analyzed the financial statements for key account
variances.
Results
- Obtained key confessions from the warehouse supervisor and two warehouse
employees.
- Installed proper internal controls designed to safeguard the assets of the company.
- Inventory variances have greatly improved.
- Proper controls are in place, giving owners peace of mind.
Unexplainable Low Margins Case Study
Situation
A client in the service industry was experiencing unexplainable low margins. This was
unacceptable to the client. He hired a forensic team to help him analyze the situation.
Solution
Experienced forensic investigators performed behavioral assessment interviews to
determine each employee's level of fraud awareness. They also looked for internal
control deficiencies and reasons for low margins. The client is provided with a
complete report regarding the findings and recommendations.
Results
- Two employees were profiled as deceptive during the interviews-due to their
responses and behavior.
- One employee, who confessed to stealing, was fired. The case was turned over to
local law enforcement; assistance in helping the client file an insurance claim.
- The client implemented recommendations for improved internal controls over cash,
resulting in increased margins.
The End