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When Should You Retain a Forensic Accountant?

When Should You Retain a Forensic Accountant?






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    When Should You Retain a Forensic Accountant? When Should You Retain a Forensic Accountant? Presentation Transcript

    • When Should You Retain a Forensic Accountant? Presented To Reach Point Alliance June 9, 2011 JE Moore
    • Summary of Topics Definition of Forensic Accounting Services Traits and Characteristics of Forensic Accountants Example Tasks Performed by Forensic Accountants Who Hires Forensic Accountants? Stages of a Forensic Accounting Engagement Example Forensic Accounting Assignments Q&A JE Moore
    • Definition of Forensic Accounting ServicesForensic accounting is the use of professional accounting skills inmatters involving potential or actual civil or criminal litigation,including, but not limited to the following:  Generally accepted accounting and audit principles  The determination of lost profits, income, assets, or damages  Evaluation of internal controls  Embezzlement and other fraud  Public corruption and business ethics  Other matters involving accounting expertise in the legal system or relating to financial investigations JE Moore
    • Forensic Accounting Skills and Knowledge Core CPA Skills Fundamental Forensic Knowledge Specialized Forensic Knowledge JE Moore
    • Forensic Accounting Skills and KnowledgeCore Fundamental SpecializedCPA Skills Forensic Knowledge Forensic Knowledge• Technical accounting • Laws, courts and dispute • Financial statement knowledge (GAAP) resolution misrepresentation• Technical auditing • Information gathering and • Fraud prevention, knowledge (GAAS) preservation detection and response• General business and • Discovery • Bankruptcy, insolvency industry knowledge • Reporting, experts and and reorganization• General knowledge of testimony • Computer forensic business law and ethics analysis• Objectivity/independence • Economic damages • Valuation • Family law JE Moore
    • Traits and Characteristics of Forensic AccountantsSource: AICPA, FVS Section JE Moore
    • Core Skills of Forensic AccountantsSource: AICPA, FVS Section JE Moore
    • Example Tasks Performed by Forensic Accountants Interpret documents and business records Reconstruct accounting records Document and quantify losses Trace transactions and flow of funds Assist with asset and business recovery efforts Conduct interviews and obtain written statements Assist with discovery, deposition, and trial preparation Prepare for and assist with arbitration/mediation Prepare exhibits for settlement and/or trial Expert witness reports and oral testimony Work with law enforcement agencies and assist in criminal prosecutions JE Moore
    • Who Hires Forensic Accountants? Lawyers Judges Investors Private/Public Companies (Executive Team; Board of Directors; Ethics Compliance Team; Internal Audit) Banks and Insurance Companies Non-Profit Organizations Government (Schools; Fire/Police; GBI, FBI) Individuals JE Moore
    • Stages of a Forensic Accounting Engagement  Planning and preparation  Information gathering and preservation  Discovery  Reporting, experts and testimony  Fees and billing JE Moore
    • Example Forensic Accounting Assignments The CFO Business Contract Internal Corporate Embezzler Dispute Investigation• Retained by $15 mil/yr Co, • Retained by attorney for • Retained by CFO of foreign- then by outside counsel former President of Co. owned $130 mil/yr company• Fraudulent disbursements • $6 mil/yr U.S. subsidiary of • $1.5 mil discrepancy• Payroll tax fraud German parent company surfaced late in YE audit• Financial statement • Disputed calculations of • Suspect died misrepresentation executive bonus plan • Reconstructive accounting• Extensive financial analysis • Involved inventory and other • Investigative interviews• Litigation support GAAP issues • Internal control• $1.2 mil civil judgment • Litigation support led to recommendations successful settlement • Ongoing P.T. CFO services• Criminal trial pending JE Moore
    • Q&AJeff E. Moore, CPA/CFF, CFE, CIRA JE Moore, CPA, P.C. Forensic and Managerial Accounting 1120 Monarch Plaza 3414 Peachtree Road, N.E. Atlanta, GA 30326 404-264-1071 jeff.moore@jemoore.com www.jemoore.com JE Moore blog: Forensic Accounting Today http://jemoore.typepad.com/blog/ JE Moore