Forensic Accounting BA 124 April 28, 2005

1. Forensic Accounting BA 124April 28, 2005 Forensic Accounting Services in a Big Four Firm

2. Forensic Accounting in a Big 4 Firm • Introduction • Investigative and Dispute Services (IDS) • Engagement Performance and Approach • Shenanigans • Trends • Questions

3. Service Line Structure Ernst & Young LLP AABS Assurance and Advisory Business Services Tax Transaction Advisory Tax Minimization Tax Operations Valuation Core Assurance Corporate Finance LLC Nat’l Advisory Services Human Capital Technology & Security Risk Services (TSRS) Business Risk Services (BRS)

4. AABS Structure • Assurance • Provides assurance on the state of an organization through financial statement audit and review of internal controls • Assesses procedures and controls • Business Risk Services (BRS) • Provides comprehensive risk services • Technology and Security Risk Services (TSRS) • Helps clients assess and mitigate information technology risk • National Advisory Services (NAS) • Helps client solve business problems and achieve high levels of performance • 4 National practices

5. Investigative and Dispute Services (IDS) • Practice Areas • Target Clients • Success Factors • Tasks and Skills • Credentials and Certifications • Typical Engagement Staffing

6. Advising corporate counsel and law firms, our more than 750 dedicated Investigative & Dispute Services professionals apply industry-specific knowledge to offer comprehensive strategies for preempting, managing, and resolving the risks of business conflict that can emerge across an organization. Our Business

7. Alternative Dispute Resolution Antitrust Construction Disputes Class Action Matters Electronic Evidence Discovery Construction Claims Expert Witness Services Large Business Interruption Financial & Economic Damages Studies Franchise & Dealership White Collar Crime Government Investigations Product Recall Patent and Trademark Disputes M&A Disputes Securities & Shareholders Disputes Key Points of Conflict

8. IDS – Practice Areas • Investigative Services • Occupational Fraud • Financial Statement and Accounting Issues • Dispute Services • Damage Analysis • Intellectual Assets • Insurance and Business Interruption • Legal Technology Services • Computer Forensics • Data Analysis • Electronic Evidence

9. IDS - Target Clients • Law firms and their clients • Corporate general counsel • Audit committees • Courts and regulatory agencies

10. IDS - Success Factors • Depth of experience • Broad based resources • National practice

11. Conducting industry and company research Analyzing key financial and industry drivers Financial modeling Analyzing and reviewing litigation documentation Creating and maintaining engagement databases Drafting client presentations Developing and communicating creative solutions IDS - Tasks and Skills

12. IDS - Tasks and Skills • Communication • Analytical • Technological / Computer • Industry Knowledge • Interpersonal • Project Management • Problem-Solving

13. IDS – Credentials and Certifications • Examples • Certified Fraud Examiner • Certified Public Accountant • Certified Financial Analyst • MBA • JD

14. IDS - Typical Engagement Staffing

15. Engagement Performance & Approach • Engagement Acceptance • Regulatory Environment • Strategy / Scope / Work plan • Performance of the Investigation • Testing, Interviews, Analysis / Predictions, Electronic Discovery / Computer Forensics • Documentation • Quality Assurance/Control • Final Report/Presentation

16. Electronic Evidence/Technology Services • Electronic Evidence • Computer Forensics • Data Analysis

17. Shenanigans • Premature recording of revenue • Bogus revenue • One time “recurring” gains • Shifting current expenses • Unrecorded liabilities • Revenue shifting • Shifting Future Expenses (Note: this slide was taken from your course notes)

18. Trends • Audit Committee Involvement • Whistleblower Status • Internal Controls / Sarbanes sec. 404 • Restatements

19. Questions? Questions?

20. Thank You Joseph Rosenbaum Ernst & Young LLP