When there are suspicions of hidden income or secret investments or bank accounts, an analysis of known bank accounts can reveal helpful details. Tracy Coenen explains how bank statements and credit card statements can be used by a forensic accountant in a divorce case.
When companies have big problems, they usually bring out the big guns. The benefits of using large law firms, audit firms, and other professional service firms are undeniable. These firms offer a depth of experience that is invaluable, and they have seemingly unlimited resources in terms of manpower. A large firm often has the ability to mobilize an engagement team quickly, and can bring in experts from around the world.
Does bigger mean better? Certainly the perception exists that larger firms provide better services. No one can fault an executive who chooses a big firm when trouble is brewing. There is an undeniable comfort level that comes with the big firms because they have established reputations and many resources. Even if the project goes poorly, no one can fault the executive who chose the large firm.
A CPA who focuses on traditional tax work or auditing services might be a great fit to branch out into litigation support work. Attorneys are always looking for expert witnesses with certain areas of expertise, and accountants doing general work might fit the bill.
What is your focus? Do you specialize in a certain industry or work frequently with certain accounting and tax rules? Litigation work is often interesting, but you have to be able to explain your work to non-accountants and testify in depositions or at trial.
The video below offers Tracy Coenen’s commentary on this topic.
There is no shortage of allegations of investment fraud since the stock market tanked in 2008. Are there more investment scams occurring, or have market conditions just led to the discovery of more of these schemes? I’ll guess the latter, although no one really knows for sure.
The beauty of fraud is that so much of it goes undetected. Those involved in financial fraud actively conceal their schemes and their involvement, so it’s impossible for fraud investigators to know exactly how much fraud is happening. For example, perpetrators go so far as to pay others to participate in the scheme and cover up phony financials and non-existent promissory notes. This kind of concealment leads to more investors putting money in a scheme, and ultimately creates ever larger financial losses.
In the end, however, it doesn’t necessarily matter if we can put our finger on exactly how many of these investment schemes are out there. What really matters is being able to identify the hallmarks of such schemes so that investors can avoid them like the plague.
The Federal government wields a big stick when it comes to business-related crimes. Violations of the Foreign Corrupt Practices Act (FCPA), fraud in the delivery of health care services or in the receipt of federal money for those services, and other whitecollar crimes can open up companies and their executives to harsh penalties under the United States Sentencing Guidelines.
Companies and executives can get reduced sentences if certain mitigating factors have been identified. One of those mitigating factors is having an effective compliance and ethics function within the company that attempts to prevent fraud and proactively identify criminal activities.
An additional way that companies have sought to mitigate their sentences is through confessing their violations of law to federal prosecutors.
Tracy talks with Miles Mason, JD, CPA about some of the common financial lies told by spouses during divorce.
I’ve written many times about how multi-level marketing (MLM) is not a business. Don’t believe me? Others have said the same thing. Today Lazy Man and Money lays out the reasons why MLM is not a business. You’ll have to read the details at his site, but the reasons include:
- Businesses obey the Commandment of Control
- Business 101 Excludes MLM
- Businesses obey the Commandment of Entry
- MLM Doesn’t Obey the Laws of Supply and Demand
- More than 99% of people LOSE money
- MLM is Not like Any Other Small Business
- It Doesn’t Matter How Hard You Work
The bottom line that any job is better than MLM. In MLM, you’re almost guaranteed to lose money. With a job, even one paying only minimum wage, you’re still making money.
I would like to think that most companies are committed to doing business honestly. They try to do the right thing, and when a problem is found, they try to correct it quickly.
Even when a scandal is looming, I hope most companies would want to find the truth as fast as possible and take appropriate action.
Even when a company is committed to fixing problems, however, management does not always do it the right way. This is particularly true when it comes to investigating suspicions of wrongdoing. There are many times when such an investigation must be done by an independent party in order for the company to be in the best possible position following the conclusion of the investigation.
The financial part of a case can become overwhelming very quickly. Particularly in cases involving white collar crime, securities fraud, Ponzi schemes, or other fraud recoveries, the trail of financial documentation is often very long. A forensic accountant needs to examine the financial documents and piece together the evidence in a way that attorneys, judges, and juries can understand.
When there are mountains of data, the investigator needs a way to quickly examine the data, assemble it in a format that is usable, find connections between transactions, and quantify results. Traditional forensic accounting techniques are no longer effective in these types of investigations. The volume of data can quickly overwhelm the investigator, and this affects the quality of the results.
Below is a clip of a portion of a video I did on accounting services in divorce and family law cases. I discuss the work that a CPA can do in divorce cases.