Forensic Accounting and Fraud Investigation for Non-Experts

Howard Silverstone, CPA, FCA, CFE, is Director at Forensic Resolutions, Inc.
 
Michael Sheetz, JD, is an adjunct professor of business law, ethics, and international law for several universities, and a former appellate law clerk for the Fourth District Court of Appeals.?
 
Stephen Pedneault, CPA/CFF, CFE, is a Principal of Forensic Accounting Services, LLC, where he specializes in forensic accounting, employee fraud, and litigation support matters. He is an adjunct professor at the University of Connecticut; is the author of Fraud 101: Techniques and Strategies for Understanding Fraud, Third Edition; contributed to Fraud Casebook: Lessons from the Bad Side of Business; and has written articles for state and national publications.
 
Frank E. Rudewicz has more than thirty years' experience conducting domestic and international investigations for fraud, ethics, and other employment-related conduct. Mr. Rudewicz has been involved in numerous high-profile and sensitive engagements regarding fraud, organized crime, compliance, and security assessments. He has appeared on Dateline NBC, Forensic Files, and various other media outlets for his investigative work. A recognized expert on security and investigations, Mr. Rudewicz lectures and teaches frequently on these topics. He often provides expert testimony and conducts independent inquiries for a variety of employee misconduct issues.

Fully revised, the proven primer on forensic accounting with all-new cases
 
A must-have reference for every business professional, Forensic Accounting and Fraud Investigation for Non-Experts, Third Edition is a necessary tool for those interested in understanding how financial fraud occurs and what to do when you find or suspect it within your organization. With comprehensive coverage, it provides insightful advice on where an organization is most susceptible to fraud.
* Updated with new cases and new material on technology tools in forensic accounting
* Covers the core accounting, investigative, and legal aspects of forensic accounting for professionals new to the field
* Covers investigative and legal issues along with accounting schemes
 
Written by a team of recognized experts in the field of forensic accounting, Forensic Accounting and Fraud Investigation for Non-Experts, Third Edition is essential reading for accountants and investigators requiring the most up-to-date methods in dealing with financial fraud within their organizations.

Preface xiii
 
Acknowledgments xv
 
PART I FORENSIC ACCOUNTING AND FRAUD OVERVIEW 1
 
CHAPTER 1 Forensic Accounting 3
 
What Is Forensic Accounting? 3
 
Why Has Forensic Accounting Become the Buzz? 4
 
Introduction to a Profession 5
 
Applications for Forensic Accounting 6
 
A Third Dimension: Contexts within Each Area of Specialization 11
 
Conclusion 14
 
Suggested Readings 15
 
Notes 15
 
CHAPTER 2 Fraud in Society 17
 
What Is Fraud? 17
 
Types of Fraud 21
 
Other Types of Financial Fraud 25
 
Sarbanes-Oxley 27
 
What the Numbers Tell Us about Fraud 28
 
Categories of Occupational Fraud 29
 
Drawing Conclusions 31
 
Society's Perception of Fraud 32
 
Who Commits Fraud?--Profile of the Typical Fraudster 33
 
The Social Consequences of Economic Crime 39
 
Conclusion 39
 
Suggested Readings 40
 
Notes 40
 
CHAPTER 3 Understanding the Basics of Financial Accounting 43
 
Where It All Begins 43
 
The Five Accounting Cycles 46
 
Journals: Subsidiary and General 54
 
Conclusion 56
 
Suggested Readings 56
 
Note 57
 
CHAPTER 4 Forms of Entities 59
 
Basics of Business Structures 59
 
Sole Proprietorships 60
 
Partnerships 60
 
Corporations 63
 
Business Enterprises in the Global Environment 66
 
Conclusion 70
 
Suggested Readings 70
 
Notes 72
 
CHAPTER 5 Fundamental Principles of Financial Analysis 73
 
Good Analysis = Due Diligence? 73
 
Why Perform Financial Analysis? 76
 
What and Whom Can You Trust? 76
 
Other Factors to Consider 77
 
Financial Analysis for the Non-Expert 78
 
To the Future 85
 
Conclusion 86
 
Suggested Readings 87
 
Notes 87
 
CHAPTER 6 The Role of the Accounting Professional 89
 
The Importance of Accounting Professionals in
 
the Investigation 89
 
The Audit Process 93
 
Internal Controls 98
 
Conclusion 101
 
Notes 101
 
PART II FINANCIAL CRIME INVESTIGATION 103
 
CHAPTER 7 Business as a Victim 105
 
Introduction 105
 
Employee Thefts 106
 
Fraudulent Billing Schemes 112
 
Fraud Committed by Outsiders 113
 
Management Thefts 114
 
Corporate Thefts 117
 
Identity Theft 118
 
Conclusion 120
 
Suggested Readings 120
 
Notes 120
 
CHAPTER 8 Business Villains 123
 
Introduction 123
 
Organized Crime and Business 123
 
Money Laundering 130
 
Conclusion 137
 
Suggested Readings 138
 
Notes 139
 
CHAPTER 9 The Investigative Process 143
 
Introduction 143
 
Case Initiation 144
 
Case Evaluation 145
 
Solvability Factors 147
 
Goal Setting and Planning 148
 
Investigation 156
 
Background 158
 
Conclusion 166
 
Suggested Readings 167
 
Notes 167
 
CHAPTER 10 Interviewing Financially Sophisticated Witnesses 169
 
Introduction 169
 
The Interview 170
 
Interviewing Financially Sophisticated Witnesses 185
 
Conclusion 188
 
Suggested Readings 189
 
Notes 190
 
CHAPTER 11 Proving Cases through Documentary Evidence 193
 
Introduction 193
 
Document Collection 194
 
Document Organization 207
 
The Process of Proof 211
 
The Logic o