A Guide to Forensic Accounting Investigation

by Thomas W. Golden; Steven L. Skalak; Mona M. Clayton; Jessica S. Pill

• ISBN13: 9780471469070
• ISBN10: 0471469076
• Format: Hardcover
• Copyright: 2006-02-01
• Publisher: Wiley

Summary

Today's demanding marketplace expects auditors to take responsibility for fraud detection, and this expectation is buoyed by such legislation as the Sarbanes-Oxley Act and the Auditing Standard (SAS99), which requires increased performance on the part of the auditor to find material financial statement fraud.Written by three of the best forensic accountants and auditors, Thomas W. Golden, Steven L. Skalak, and Mona M. Clayton, The Auditor's Guide to Forensic Accounting Investigation explores exactly what assurances auditors should provide and suggests alternatives to giving the capital markets more of what they are requiring-greater assurances that the financial statements they rely upon for investment decisions are free of material error, including fraud. It reveals the surprising complexity of fraud deterrence, detection, and investigation, and offers a step-by-step approach to understanding that complexity.From basic techniques to intricate tests and technologies, The Auditor's Guide to Forensic Accounting Investigation is a rich, multifaceted, and fascinating answer to the need for wiser, savvier, better-trained financial statement and internal auditors who are thoroughly familiar with fraud detection techniques and the intricate, demanding work of forensic accounting specialists.

Author Biography

Thomas W. Golden, CPA, CFE. specializes in providing consulting and expert witness testimony in both civil and criminal matters with special expertise in forensic accounting, fraud investigation, and financial statement accounting.  He is a former Chairman of the Board of Regents for the Association of Certified Fraud Examiners and the current President of the Better Government Association, a citizen watchdog group in Chicago, IL.  Mr. Golden is an adjunct professor at DePaul University.

Steven L. Skalak, CPA, is the National Practice Leader for PwC Investigations & Forensic Services of PricewaterhouseCoopers LLP.  He has participated in a variety of corporate investigations relating to allegations that the Securities and Exchange Acts were violated, and of accounting or auditing improprieties.  Steve has represented Audit Committees, Directors, Officers, Auditors, and Companies in class action litigation with shareholders and SEC investigations.

Mona M. Clayton, CPA, CFE, specializes in international fraud investigations with particular emphasis in Latin America where she has conducted investigations.  She has designed investigative practice aids providing for consistent methodologies to be incorporated across common scheme investigations. Ms Clayton is an adjunct professor at DePaul University.

Table of Contents

Section 1. Introduction to Forensic Accounting and Fraud.

1. Fraud: An Introduction.

2. Roles of the Auditor and the Forensic Accounting Investigator.

3. The Psychology of the Fraudster.

4. Fraud and the Capital Markets.

5. Enron and WorldCom.

6. The Expectations Gap and the Law: Toward Expanded

Auditor Responsibility and Liability.

7. Independence, Objectivity, Skepticism.

8. Forensic Investigations and Financial Audits: Compare and Contrast.

Section 2: The Auditor’s Role

9. Red Flags and Fraud Detection Techniques.  

10. Internal Audit: The Second Line of Defense.

11. Financial Statement Fraud: Revenue and Receivables.            171

12. Financial Statement Fraud: Other Schemes and Misappropriations.       205

13. When to Call in Forensic Accounting Investigators.            223

14. Teaming with Forensic Accounting Investigators.            235

15. Common Missteps: What auditors and executives

should not do when fraud is suspected. 251

16. Investigative Techniques.            267

Section 3:  The Forensic Accounting Investigator’s Role.

17. Anonymous Letters.

18. Background Investigations.

19. The Art of the Interview.

20. Analyzing Financial Statements.

21. Data Mining: Computer-Aided Forensic Accounting Investigation Techniques.

22. Building a Case: Gathering and Documenting Evidence.

23. Making a Criminal Referral.

24. Report of Investigation.

25. Working with Attorneys.

26. Conducting Global Investigations.           

27. Money Laundering.

28. Other Dimensions of Forensic Accounting.           

Section 4:  A Look to The Future.

29. Looking Forward:  The Future of Forensic Accounting.