This document discusses when to retain a forensic accountant. It provides definitions of forensic accounting and describes the skills and traits of forensic accountants, including technical accounting knowledge, auditing skills, and expertise in areas like fraud investigation. It outlines example tasks forensic accountants perform, who typically hires them, the stages of an engagement, and example case assignments. The presentation concludes with a Q&A section.

1. When Should You Retain a
Forensic Accountant?
Presented
To
Reach Point Alliance
June 9, 2011
JE Moore

2. 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

3. Definition of Forensic Accounting Services
Forensic accounting is the use of professional accounting skills in
matters 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

4. Forensic Accounting Skills and Knowledge
Core CPA
Skills
Fundamental
Forensic
Knowledge
Specialized
Forensic
Knowledge
JE Moore

5. Forensic Accounting Skills and Knowledge
Core Fundamental Specialized
CPA 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

6. Traits and Characteristics
of Forensic Accountants
Source: AICPA, FVS Section JE Moore

7. Core Skills of Forensic Accountants
Source: AICPA, FVS Section JE Moore

8. 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

9. 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

10. Stages of a Forensic Accounting Engagement
 Planning and preparation
 Information gathering and preservation
 Discovery
 Reporting, experts and testimony
 Fees and billing
JE Moore

11. 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

12. Q&A
Jeff 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