1. FORENSIC ACCOUNTING - BA124 – Fall 2010Slide 3-1 Today’s Topics n Fighting Fraud n Fraud prevention n Early detection n Fraud investigations n Legal intervention

2. FORENSIC ACCOUNTING - BA124 – Fall 2010Slide 3-2 Fraud Prevention n Culture of honesty and integrity n Manage by example n Hire the right people n Communicate expectations n Positive work environment n Maintain effective policies for punishment n Enterprise risk management n Identify risks-likelihood and impact n Implementing controls n Widespread monitoring n Effective audit function

3. FORENSIC ACCOUNTING - BA124 – Fall 2010Slide 3-3 Fraud Detection n By chance n By intent-new trend

4. FORENSIC ACCOUNTING - BA124 – Fall 2010Slide 3-4 Fraud Investigation n Predication: circumstances that lead to past, present or future fraud n Using the evidence square n Testimonial evidence n Documentary evidence n Physical evidence n Personal observation n Using a variation of the fraud triangle n Investigation of theft n Investigation of concealment n Investigation of conversion n Direct inquiry

5. FORENSIC ACCOUNTING - BA124 – Fall 2010Slide 3-5 Investigation Process n Establish truth n Use experienced investigators n Guard hypotheses n Prudent communication n Independent corroboration of information n Avoidance of questionable techniques n Fair and objective reporting

6. FORENSIC ACCOUNTING - BA124 – Fall 2010Slide 3-6 Legal Action n None n More than 50% n Civil n Good for non employees n Criminal n Restitution and jail time n Harder to convict n Higher degree of evidence