Accounting: the Forensic Accounting Who Fought Whiet Collar Crime Essay

AbstractThe global add in bosh has take a leakd many people to lose consecrate in accountants. However, experts in the empyrean of Forensic Accounting, such as informed mockery Examiners, are restoring ethics and trust by fighting to deter white-collar crimes. The roughly prevalent vitrine of craft encountered is occupational pretender. Under occupational humbug the most common and consequential organizations are asset embezzlement and fraudulent statements. Due to the rapid increase of occupational fraud, organizations have implemented anti-fraud controls. Statistics have shown that these controls have helped to decrease the likelihood of fraud. This examinationination of Forensic Accounting points off the importance of Certified Fraud Examiners in the economic, business, and financial fields within the International Community.See moreMasters of Satire John Dryden and Jonathan Swift EssayForensic Accounting Fighting sinlessness Collar CrimeWhen asked about ethical issues in the field of story, Raymond Reisig, both a Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE), verbalise that ethics is the foundation which accounting stands on because Our whole profession depends on people trusting us. However, due to the lack of ethics in many heavy(a) companies involved with fraud, the semipublic has lost faith in the accounting profession. Hoping to restore the trust of society, many companies worldwide have incorporated Forensic Accounting into their industries. Essenti all in ally, the cabalistic to stripping fraud is by following a trail of money that will eventually lead to evidence that proves where the money has gone. This has been the hire out of Certified Fraud Examiners for years. A number of different types of frauds occur daily, but the most prevalent type of fraud that seems to catch the publics eye is occupational fraud. Everyday, Certified Fraud Examiners are working hard to fight off occupational fraud in corp orate America.According to the Association of Certified Fraud Examiners (ACFE), occupational fraud is the use of ones occupation for personal enrichment by the deliberate misuse or misapplication of the employing organizations resources or assets (2010, p. 6). occupational fraud has now become a global problem, which has substantially increased the demand for forensic accounting. Forensic accounting is one of the many branches in accounting under this specific branch exists Certified Fraud Examiners. Certified Fraud Examiners are experts specifically trained to find fraud, invent the commissions in which the fraud was committed, and uncover who may have committed the crime. Two of the many schemes under occupational fraud that certified fraud examiners are confronted with are asset misappropriation and fraudulent statements. Report to the Nations, a worldwide study of 1,843 cases of occupational fraud from 2008-2009, found that in the U.S. Asset misappropriation schemes were the most common form of fraud representing 90% of all cases (ACFE, 2010, p. 4).Asset misappropriations range from conspiracies like skimming, when an employee does not record a sale and instead pockets the money, to schemes like check tampering, when an employee steals blank checks from the company and writes them out to himself. However, the most common fraud is billing. Billing happens when an employee deceives his employer to make false payments by submitting invoices for fictitious goods or services. One example of this could be found in a recent report in The naked York Times. Anita Collins, 67, who is being charged for grand larceny in the first degree, for embezzling over $ 1 million over septenary years from the Archdiocese of New York. Anita was fit to skillfully delude the Catholic Church by sending fictitious invoices to the Archdiocese and issuing 468 checks to accounts she controlled (Otterman 2010).Billing alone crowd out cause an organization to lose, on average, $128, 000 annually. Although Asset misappropriation is the most common type of fraud, according to Report to The Nations it is the least costly. In contrast to asset misappropriation, fraudulent statements nevertheless made up less than 5% of all cases in the same study. However, these schemes are the most consequential, causing a median loss of more than $4 million annually (ACFE 4). Fraudulent statements involve the manipulation, falsification or alteration of accounting records, misrepresentation of financial statements, and the misapplication of accounting principles relating to amounts (Crumbley 2009). Financial statement schemes can be very hard to catch because they are buried under false numbers and fake company names. In a recent New York Times article authors Hiroko Tabuchi and Keith Bradsher revealed that in October 2011, Michael C. Woodford, former Olympus president and chief executive, exposed the corporations fraudulent accounting.The scandal covered up $1.7 meg in losses by misstating their finances on their income statements. The corporations former and current executives tactically buried their losses so that external auditors could never discover them (Tabuchi 2012). Due to the complexity of financial statement fraud, such as the Olympus scandal, many companies hire certified fraud examiners to investigate their financial statements when they suspect fraud is present. Occupational fraud is hard to detect due to the fact that owners and executives commit most fraud. Take for example the case of Maria do Rosario Veiga. Ms. Veiga was an experienced auditor who had been working for the World Meteorological Organization for 4 years to begin with she blew the whistle on their fraudulent behavior. Ms. Veiga was fired from the organization because she refused to cover- up an embezzlement scheme of 3.5 million dollars stolen by senior officials (WMO 2009).For this reason many organizations have implemented anti-fraud controls to prevent and detect fraud . Anti- fraud controls consist of controls such as hotlines, fraud bringing up for employees, surprise audits and employee support programs. In both study since 2002, the Association of Certified Fraud Examiners have found that tip offs are the most common and effective way to detect fraud (ACFE 4). This study found that tips detected 40.2 percent of all cases employees were the most common source of fraud tips (ACFE 17). Anti- fraud controls are reinforcing ethical standards in the field of accounting. A specific case study examined by CFE Tracy Coenen exemplifies the right way to comprehend with receiving a tip from an employee about fraud. First, the board of directors must determine that an independent investigation of the allegations should be done. After this, they seek unbiased analysis, and retain an outside counsel and a forensic accountant to investigate.Management then gathers all documents relevant to the allegations, and gives the investigator access to all employe es and accounting records (Coenen 2011). Going through such procedures should be important to any company who receives a suspicious tip from an employee. Due to the major business scandals involving asset misappropriation and fraudulent statements, it is crucial for CFEs to have a good understanding of these schemes. Examining fraud involves close examination and piecing unitedly financial evidence to find the hidden truth behind numbers. For this reason, the requirements to become a CFE include earning a Bachelors Degree, passing a ten-hour exam and having at least two years of professional experience in the related field (Meservy, 2006, p. 164). Not only do these requirements prepare a CFE before going into the field of forensic accounting, but they in any case ensure the public that the work of a CFE is trustworthy.Although it is very important that CFEs obtain knowledge of fraudulent behavior, it is also important that they acquire other skills as well. Many times when people hear the word accountant they rarely think of a person who has clear communication and writing skills. However, this is a very misleading misconception In fact in a survey of 725 CFEs, communication and people skills were account as diminutive by 44% of the recipients (Meservey, 2006, p. 176). These skills are viewed as critical because when a fraud examiner is investigating a case, he or she must be able to speak directly with their client A CFE must also be able to orally present their findings in a courtroom to a hazard and jury in a way that is clear and easy to understand (Wells, 2009). Along with communication and people skills, surprisingly, writing skills are also one of the most important.After a fraud examiner collects all the evidence needed, he or she must report their findings A majority of the time these findings are reported by writing. Tracy Coenen, a fraud examiner and forensic accountant, stresses that, The best financial expert witnesses help win cases by artf ully and simply communicating the facts through written reports (Coenen, 2007). For this reason, a CFE must have strong writing skills. A part of effectively reporting facts is following an ethical code by rest unbiased about the innocence or guilt of the suspect, and reporting only relevant facts. If there is a lack of clarity in the way facts are reported and communicated, not only can it cause the jury to lose trust in the CFEs findings, but essentially cause a negative resultant role on a case (Coenen, 2007).The corner stone of the accounting field is ethics. For this reason, being ethical is the most important skill a CFE should acquire. Huge fraud cases such as the collapse of Enron and WorldCom led to higher costs for products and services, mistrust in leaders and a loss in retirement funds and job security (Crumbley, 2009). This was one of the driving forces that led to the passing of the Sarbanes-Oxley Act of 2002. This act not only regulated the auditing profession but i t also demonstrated to the public that accountants value ethical standards.Up until now this act is based on making everyone responsible for fighting fraud by increasing all parties responsibilities for uncovering such fraud in every direction at every stop in the process (Crumbley 2009). Not only has the Sarbanes-Oxley Act helped to gain the trust of the public, but CFEs have also played a huge role in this as well. The fact that the main task of a CFE is to deter and detect fraud, proves to society that the field of accounting remains ethical and fair. Fraud has caused many people to lose their trust in accountants however, the field of accounting is implementing many shipway to reduce fraud.Forensic Accounting plays a huge role in this because Certified Fraud Examiners are being used to analyze and examine financial statements in a way that normal accountants cannot. Through excellent communication and writing skills CFEs have ultimately proven that accountants do more than just deal with numbers. The increase in demand for Forensic Accounting shows that our ethical standards are still our main priority. Unfortunately, occupational fraud is something that always occurs in every organization we cannot change this. However, what forensic accounting can change is the way which society views accountants as ethical.