The Forensics Frontier

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  • 1. The Forensics Frontier NTCA 2010 Finance & Accounting Conference Orlando, Florida September 9, 2010 Presented By: William Brown, CPA, CFFA, CFE Eigen Heald, MsIA, CISSP, GCFA
  • 2. Overview • Description – What? Who? • Applications – When? Why? • Tools and Techniques – How?
  • 3. Description • Terms and definitions • Professional standards and credentials • Contrast with conventional accounting and auditing
  • 4. Terms and Definitions • Forensics – “Suitable for use in a court of law.” Forensic accountants generally work to this standard and toward this potential outcome. • Forensic accounting – The specialty practice area of accountancy that describes engagements that result from actual or anticipated disputes or litigation. • Digital forensics – a branch of forensic science pertaining to legal evidence found in computers and digital storage media. Also known as computer forensics
  • 5. Terms and Definitions • Fraud investigation – Purpose is to prove or disprove the legal elements of an offense • Litigation support – Any professional assistance provided to lawyers in the litigation process – Expert witness vs. expert consultant
  • 6. When do you Need Forensic Accounting? In practice, forensic accounting is applied anytime you have reason to believe that you can’t take numbers at face value, and/or the only data available doesn’t allow for traditional analysis.
  • 7. Professional Credentials • Certified Public Accountant (CPA) • Certified Fraud Examiner (CFE) • Certified in Financial Forensics (CFF) • Certified Forensic Financial Analyst (CFFA) • GIA Certified Forensic Analyst (GCFA) • Business valuation credentials (i.e. CVA, ABV) • Management accounting credentials • Internal audit credentials • Information technology credentials
  • 8. Contrast with Conventional Accounting & Auditing • Investigative • Reconstructive • Analytical • Verifying existing information vs. looking for what’s not there • Responsibility and risk vs. cause and source
  • 9. Applications • Fraud • Disputes • M&A
  • 10. Fraud • Financial statement misstatement – The deliberate misrepresentation of the financial condition of an enterprise accomplished through the intentional misstatement or omission of amounts or disclosures in the financial statements to deceive financial statement users
  • 11. Fraud • Asset misappropriation – The intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose • Bribery and corruption – Off-book schemes such as kickbacks, gifts or gratuities to government employees from contractors or to private business employees from vendors
  • 12. Disputes • Litigation, arbitration, mediation, settlement • Focus on economic damages and lost profits • Often supports business valuation • Examples: – Marital dissolution (divorce) – Breach of contract – Business dissolution – Bankruptcy – Insurance claims – Negligence claims
  • 13. Tools & Techniques • Financial analytics – Numbers • Investigative techniques – People • Computer forensics – Data
  • 14. Digital Forensics Case Study • Wire transfer fraud – Malware – Disk imaging – Documentation – Data conservation/chain of custody issues – Online banking risks
  • 15. Summary & Conclusion • Review – Description – Applications – Tools & Techniques • When is forensics required? • What do you do first?
  • 16. Contact Information Bill Brown bbrown@bdmp.com (207) 541-2208 Eigen Heald eheald@bdmp.com (207) 541-2311 Forensic & Valuation Services Telecommunications