Female Forensic Accountant: Does Gender Matter to Your Lawsuit?


Are you seeking a female forensic accountant or fraud investigator to be an expert witness in your case? Do you think a woman on the team might be helpful if your case goes to a jury trial? Are you looking for diversity that may appeal to a wide range of jurors? Does it really matter?

I don’t care much about the gender of my clients, and most of my clients don’t seem to care much about my gender. Almost all of my work comes from attorneys (on behalf of their individual or corporate clients), and most often I am dealing with someone at the partner level. Because of this, my clients are overwhelmingly male. Continue reading

Don’t Believe Tax Reduction Commercials


You hear the commercials on television and radio almost daily: We can reduce your tax debt to pennies on the dollar.  The charlatans claim they can help get rid of your IRS debt and state income tax debt. Who they’re really helping is themselves…. to your wallet.

Probably the most well-known tax debt reduction professional was Roni Deutch, known as “The Tax Lady.”  Her firm purported to provide help to clients with Offer in Compromise needs, IRS installment agreements and Currently Not Collectible tax accounts. Unfortunately, it appears Roni took a lot of money from people and provided them little or no help in return. Continue reading

Net Worth Method of Proof – Internal Revenue Service Documentation


The below information is the Internal Revenue Service explanation of the Net Worth Method of Proof, with details on how the calculations are done. This page on the IRS website is the source of the information.  (11-05-2004)
Net Worth Method of Proof

  1. An investigation utilizing the net worth method of proof differs from a specific item method in that direct comparisons of income, expenses, and credits can not be made. The net worth method of proof utilizes evidence of income applications such as asset accumulation, liability reduction, expenditures, and other financial data to indirectly establish correct taxable income. Continue reading

Truth About MLM: Almost Everyone Will Lose Money


Last week the Salt Lake Tribune published a fantastic article about the reality in multi-level marketing, entitled Utah Juice Companies Offer Few Prospects. MLMs like Mary Kay, Amway, MonaVie, and Herbalife have been claiming that the great recession has increased the number of distributors because people are looking for ways to make money during this time of high unemployment. The problem with this claim is that while more people are signing up for these bogus business opportunities, almost no one is actually profiting from their activities.

Multilevel marketing companies like to refer to themselves as “direct sales” companies. They want to keep the focus off recruiting and onto selling of the products directly to customers. The problem is that little actual retail sales occur for a number of reasons: Continue reading

The Failed Policies Of the Past


Guest post by Steve Oliver

The current #Occupier of the White House loves to tell us about the “failed policies of the past…”  But let’s have a look at what the real failed policies of the past are:

The War on Poverty.  According to the Census Bureau, in 1966 the poverty rate was 11.8%.  It has remained in a range between 8.7% and 12.3% for the last 46 years.  Fail.  Giving money to people with no strings attached does not eliminate poverty.  Helping those who cannot help themselves is a moral obligation, but the able-bodied need to work and pay their bills and taxes like the rest of us.   Continue reading

When Employees Steal, the SEC May Punish the Company and the CEO


Guest Post by Keith Paul Bishop

Editor’s Note: This article was originally published on Keith Bishop’s blog, California Corporate & Securities Law on November 23, 2011. It offers us a different view from that of Tracy Coenen regarding the SEC’s action against Michael Koss and Koss Corp. for the embezzlement perpetrated by Sujata Sachdeva.

In this week’s issue of Compliance Week, Tammy Whitehouse writes about the SEC’s recent enforcement action against Koss Corporation and Michael J. Koss, its Chief Executive Officer and former Chief Financial Officer. Continue reading

IFRS and Fraud: More Challenges, More Risks


AICPA Corporate Financie Insider Newsletter
Written by Tracy Coenen, CPA, CFF

AICPA Corporate Finance Insider Newsletter

Reasonable accountants can disagree about whether a move to International Financial Reporting Standards (IFRS) will improve financial reporting. One key concern is that principles-based financial statements are much more susceptible to fraud. Rather than relying on strict rules, management’s judgment will guide much of the reporting. Clearly this creates a risk of fraud, but how big is the risk?If we look at companies engaged in financial statement fraud under Generally Accepted Accounting Principles (GAAP) reporting, we often see that the abuse happens in accounts that require judgment in establishing balances. For example, reserve accounts require management to estimate the cost and timing of expenses. Sometimes firms intentionally understate the reserves to boost net income, thereby easily abusing these accounts. Other times, reserves can be overstated to create a cookie jar through which future losses can be concealed. Continue reading

$849 Billion in Fraudulent Securities Bought By the Fed: What Are They Going To Do About It?


Guest post by Charles Seavey

The Federal Reserve owns $849 billion in mortgage-backed securities. Total reserves are $2,872 billion, so mortgage-backed securities comprise 30% of reserves. (No wonder the dollar can’t bounce, even with Europe falling apart.)

See: http://www.federalreserve.gov/releases/h41/Current/

To give a sense of the scale of this unprecedented investment in questionable private securities, currency in circulation is $1,052 billion so the Fed owns almost as many mortgage-backed securities as there are dollars in existence. Continue reading

J2 Global Communications Trying to Hide Accounting Errors


J2 Global Communications (NasdaqGS: JCOM ), better known as eFax, is under fire. Yesterday, Sam Antar tore into the company for an accounting gimmick that the company (and its auditors) had to know was wrong. The issue involves revenue and deferred revenue.

In the 10-Q for the first quarter of 2011, J2 reported an upgrade to its accounting system. The new system gave J2 the ability to properly calculate unearned revenue from annual contracts with customers: Continue reading

Fortune Hi Tech Marketing Settlement with Texas Attorney General


I’ve written previously about Fortune Hi Tech Marketing (FHTM), a multi-level marketing company that is all about recruiting more people into your pyramid, rather than actually selling products.

Fortune Hi-Tech Marketing has previously been the target of legal action by the Attorney General of North Dakota, and has been a target of the North Carolina Attorney General, cracking down on “business opportunities”: Continue reading