What on earth do fraud and infidelity have in common? Quite a lot. While there may be no scientific studies available that analyze the correlation between financial fraud and infidelity, anecdotal evidence suggests there is a connection.
A discovery of a corporate fraud has often led to the discovery of a secret addiction like gambling, alcohol, or drugs. Digging into the financial records of a suspected thief finds a spending problem, a secret source of income, or theft from another party. Discovery of fraud has also led to a spouse finding out about infidelity and the existence of a love child.
The theory that fraud and infidelity are often related is simple: Fraud does not happen in a vacuum. It takes a certain mindset to be able to commit adultery and to be able to commit fraud. I have rarely seen extremely deceitful acts being confined to only one part of a person’s life.Continue reading
This Thursday Sept. 3: Becoming a Fraud Investigator course at CPA Crossings.
This is a 2 hour online course, and is the first in a 4 part series on conducting fraud investigations. It is jam packed with forensic accounting information, but it’s cheap at only $89 for 2 CPE credits!
What is it about? It’s getting you ready to perform a fraud investigation with information from a forensic accountant like:
– Common workplace fraud schemes
– Red flags of occupational fraud
– Skills of a fraud investigator
– Planning the fraud investigation
– Budgets, fees, and engagements letters
Who should take this course?
Anyone who wants to learn to investigate financial frauds. Accountants, private investigators, risk management professionals, law enforcement officers.
Thursday, September 3, 2020 at 11:30am Eastern. (If you miss it, the course will be taught again on October 5.) The format is me on camera along with a PowerPoint presentation.
If you try to research fraud by millennials (those born between 1980 and 1994, currently 26-40 years old, also referred to as Gen Y), most everything you find will be about them being victims of fraud. It appears that millennials are the age group most likely to fall for financial scams, falling victim to consumer fraud twice as often as senior citizens.
But what about millennials as perpetrators of occupational fraud?
They’re at an age where they are moving into management, and may be at the beginnings of the executive ranks.
Wouldn’t it be important to know how likely this group is to commit fraud?Continue reading
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 alone 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.
Many of these cases involve moving money around rapidly between multiple bank and brokerage accounts to disguise the true sources and uses of funds. The long trail of financial documentation needs to be examined by a forensic accountant and the data must be pieced together to find where the money really went.Continue reading
I’ve become really good at tracing funds through multiple bank accounts with tens of thousands of transactions. The goal is to find where the money went, and if we’re lucky find evidence of hidden accounts. I usually find a hidden account when someone is sloppy: a transfer to a bank that we didn’t know about, no matter how large or small the amount.
Apparently R. Kelly was on a recorded line from jail when he told people to contact a person who was supposed to open an account to receive money indirectly from him. In other words, someone opened an account in their name to hold onto R. Kelly’s money for him. Continue reading
If you want to learn how to do fraud investigations from a forensic accountant what has over 20 years of experience in the field… here’s your chance!
This course is for:
Accountants who want to begin doing financial investigations
Investigators who need training on the financial aspects of investigations
Students considering a career in forensic accounting
The course is divided into 4 classes that are each 2 hours long. You can take all of them or some of them. You can take them in any order. In other words, none of the classes is dependent on the others. Each could easily be taken alone.
This fraud investigation course is being offered by CPA Crossings. The classes are online, generally offered one per week, so you could take all four courses with a calendar month. These are not your usual boring PowerPoint with voiceovers. You get actual videos of me teaching with PowerPoints used to supplement and highlight the material.
Here is a summary of the four sessions, along with my affiliate link to register for the class. (Please use my link so I can get credit for referring you to CPA Crossings and we can track the success of my postings.) In future posts, I’ll go into greater detail about each of the courses. The series kicks off on September 3, 2020.
How to terrify just about anyone: Tell them their taxes are being audited.
Even worse: When their books and records are a mess. (Or maybe even non-existent.)
Every number could be scrutinized. That means documentation must be produced to support the amount of each expense and the business purpose of the item.
Some of us are meticulous in our documentation, but if you are like most taxpayers, you have pockets of misplaced or destroyed data. Even worse, you may be in a situation where documentation was completely destroyed by a fire or flood. If you don’t have documentation, does that mean your deductions are automatically disallowed? Not necessarily.Continue reading
Artificial Intelligence (AI) is everywhere. And companies that fine new or better ways to use AI create advantages for themselves, largely because it may give them the ability to scale things a reduced cost, and also because it may attract new clients who want this technology advantage.
In accounting, AI is most typically used to automate bookkeeping functions: recognizing payees and automatically categorizing transactions, matching transactions (ex. matching a purchase order to an invoice), automatically producing certain financial reports, basic financial analysis. (AI isn’t yet good at complex financial analysis, but the ability to interpret data will continue to develop.)
Overall AI decreases the need for manual tasks such as inputting data and routine analysis of financial statements. That frees up accountants to do more specialized tasks. Think of it as automating the administrative tasks so the accountants can do the creative tasks.
I also use AI in my forensic accounting practice, although you might not recognize it as that. When I use software to perform data analytics (which has been around for a long time), I’m using AI. The data analytics are often centered around analyzing large sets of data to identify anomalies or patterns that are concerning. But we can also use AI to help link sets of data (think of matching transfers between accounts or matching bank transactions to underlying accounting system data). Continue reading