1 / 24

Today’s Topics

Today’s Topics. Methods for Investigating Fraud Theft Investigation Methods Concealment Investigation Methods Conversion Investigation Methods Inquiry Methods. Fraud Investigation. Fraud Investigation. Evidence Square Approach Testimonial evidence Documentary evidence Physical evidence

dyani
Download Presentation

Today’s Topics

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Today’s Topics • Methods for Investigating Fraud • Theft Investigation Methods • Concealment Investigation Methods • Conversion Investigation Methods • Inquiry Methods FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  2. Fraud Investigation FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  3. Fraud Investigation • Evidence Square Approach • Testimonial evidence • Documentary evidence • Physical evidence • Personal observation • Fraud Elements Plus Inquiry Approach • Theft investigation • Concealment investigation • Conversion investigation • Inquiry investigation FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  4. Investigating Theft FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  5. Theft Investigation • Surveillance and covert operations • Invigilation • Physical evidence • Generally costly and time-consuming FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  6. Theft Investigation Bull’s-Eye • Check records • Interview former employees, vendors • Search public records • Interview employees, buyers etc. • Interview suspect FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  7. Coordinating the Investigation • Vulnerability Chart (spread sheet) • What was taken? • Who had the opportunity? • How were assets moved? • How was it concealed? • How were the assets converted? • What were the red-flags? • What were the possible motives? • What were the sources of rationalization? • What internal controls were lacking? FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  8. Surveillance and Covert Operations • Fixed, tailing or electronic • Legal, but subject to the 4th Amendment protection against unreasonable searches • Avoid fishing expeditions FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  9. Invigilation • Observation that takes away virtually all opportunities for fraud • Before and after comparisons • Use only with management approval • Costly FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  10. Physical Evidence • WTC example • Northern Exposure example FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  11. Investigating Concealment FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  12. Concealment Investigation • Examination of documents • Routine audits • Extended computer searches • Physical asset counts FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  13. Documentation • Documents do not forget …but • Keep in mind these cautions • Maintain chain of custody • Provide unique markings • Organize the evidence effectively • Strive to obtain original documentation • Consider use of Document Experts FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  14. Hard-To-Get-Documents • Subpoena • Search warrant • Voluntary consent FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  15. Investigating Conversion FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  16. Role of Conversion Analysis • Helps determine the extent of the fraud • Serves as a facilitation for confession FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  17. Sources of Information(Study pages 254-261) • Variety of sources • Federal government sources • State government sources • Local government sources • Financial institution records • Public databases • Internet sources Don’t try to memorize the details of these sources. Know how to use some of them. FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  18. Net Worth Method • For use in estimating “Funds from Unknown Sources” • Calculation: • Assets - Liabilities = Net Worth • NWc - NWP = Net Worth Increase • NWI + Living Expenses = Income • Income - Known Sources = Unknown Sources FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  19. Interviewing & Reporting FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  20. General Interview Guidelines • Be aware of the “crisis cycle” • Remain a people person • Engage rather than challenge • Conduct the interview as close to the event as possible • Plan for the interview • See text for demeanor (p.281) & language (p.281) FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  21. Types of Questions • Introductory • Informational • Assessment • Closing • Self Admission-use carefully FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  22. Interview Facilitators • Expectation fulfillment • Recognition • Altruism • Sympathy • Newness • Catharsis • Sense of meaning • Availability of rewards Don’t try to memorize the details of this list. Know how to use some of them. FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  23. Interview Inhibitors Unwilling Don’t try to memorize the details of this list. Know how to use some of them. Unable Time demands Ego threats Etiquette Trauma Forgetfulness Time-line confusion Logic confusion Unconscious behaviors FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

  24. Fraud Reporting • WFO Suggestion: • Summary • Chronology • Interview & Procedural Summaries • Admission information • Loss Assessment FORENSIC ACCOUNTING - MSA 220 I - Spring 2014 6-

More Related