WELCOME TO ACC752 CLASS

Forensic Accounting & Fraud

Investigations

SEMSTER 1, 2020
LECTURER : MASLYN. TAUVAVE
Email: rekoapata@gmail.com
 ASSSESSMENT
1.Internal Assessment : 50%

Tutorial: 5%
Assignment (1): 10%
Mid Semester Test: 15%
Major Assignment: 15%
Presentation: 5%

2.Final Exam: 50%

 Introduction to Forensic Accounting
Learning objectives:

1.Define forensic Accounting

2.Explain the scope of forensic accounting
3.Explain the purpose of forensic accounting
4.Outline the importance of forensic accounting
5.Describe the profession
6.Explain how forensic accounting is applied
LO1: What is Forensic Accounting?
“Forensic accounting is the action of
identifying, recording, settling, extracting,
sorting, reporting, and verifying past financial
data or other accounting activities for settling
current or prospective legal disputes or using
such past financial data for projecting future
financial data to settle legal disputes”
 LO1: What is Forensic
Accounting? (Cont.)
2. Forensic accounting is an examination
into a company’s financial statements that
utilizes accounting, auditing, and
investigative skills.

3. Investigative branch of Accounting.

 LO2: Scope of Forensic Accounting

Several major financial statement

fraud schemes:
 E.g Enron and WorldCom

Forensic accountants engaged to

uncover the truth in the widely
publicized frauds
 LO2: Scope of Forensic
Accounting (cont.)

Forensic accountants specializing in :

 business valuation,
damage calculations,
 insurance claims,
fraud investigations, and
bankruptcy
 LO3 : Purpose of Forensic
Accounting
1. Litigation support services
 A forensic accounting expert measures the
damages experienced by the parties
implicated in legal disputes and can aid in
settling conflicts.
2. Investigative/fact-finding services.
Forensic accounting techniques –
Accounting, Auditing & Investigative skills
 LO3 : Purpose of Forensic
Accounting cont….
3. Expert opinions expert witness in court

Need for specialization :

 Litigation Support – Settle disputes. E.g Insurance
claim, etc…..

Investigative service - financial statement fraud

schemes eg. Misappropriation of assets , white-
collar crime, etc…
 LO4. Outline the importance of
forensic accounting
There has been an increasing number of high profile
corporate collapses. Eg. Enron scandal and
Worldcom.

'White collar' crime has become more frequent and

more sophisticated.

Commercial transactions are more complex- Eg.

Financial statements fraud
 LO4. Outline the importance of
forensic accounting cont….

Proactive & Reactive approaches to

accountancy:
 Prevention
 Detection &
 Response.
 LO5.Describe forensic
accounting profession
Combination of accounting, auditing and
investigative techniques to discover financial
crimes.
Explain the nature of a financial crime to
the courts.
Used by the insurance industry to establish
damages from claims.
 LO6. Forensic accounting is Process

1. Map out the investigation

2. Gather evidence to support the case.
3. Prepare the report – ‘Expert Report’.
4. Testify in court
 Forensic accounting – Flowchart

Step 1.
Step 2. Step 3 Step 4
Map out the
investigation Gather Prepare the Testify in
evidence to report court
support the
case
• Forensic
• Master Plan - • Various tools • Chronologica accountants
Understand the and techniques gather evidence
l order
issue & its for analysis & and may also
report. serve as
control examination of
• Provide testifying experts
environment. evidence.
Recommend in trials.
ations • Expert witness
• Expert
report
 END OF LECTURE CLASS
Thank
You!