Dr. Robert L. O’Block is the founder of the American College of Forensic Examiners Institute (ACFEI), an independent scientific and professional association providing education, certification and representation for forensic examiners worldwide. This Q&A was prepared by AICPA Editor-at-Large Rick Telberg. What makes forensic accounting such a hot career choice right
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TOPICS
Forensic services
Selecting the Right Investigative Resource
It’s Friday at 4 p.m., seven days before the filing deadline for an SEC registrant’s annual financial statements. The general counsel has just received a detailed but anonymous email alleging improper revenue recognition at the company’s Chinese subsidiary and must decide what to do next. This scenario, enough to panic
Detecting Circular Cash Flow
Following an initial customer confirmation request with no response, a first-year auditor mails a second and third request, all under the supervision of the auditor-in-charge assigned to the account. Field work begins on the audit, but there is still no response from the customer. Another auditor scanning the cash journal
UBS Targets Come Into Focus
The IRS has released the selection criteria for identifying holders ofaccounts with Swiss bank UBS under a U.S. settlement agreement with the Swiss government negotiated in August. Under the agreement, UBS will turn over information concerning approximately 4,450 accounts for investigation. IRS Commissioner Doug Shulman also recently announced that about
AICPA Files Suit Challenging Identity Theft Rule
The AICPA filed a lawsuit on Tuesday seeking to bar the Federal Trade Commission from applying its so-called Red Flags Rule to CPAs. The Institute says the rule, which is designed to help prevent identity theft, would “impose onerous and unnecessary requirements on AICPA members.” The lawsuit, filed in U.S.
Identity Theft
The AICPA asked the Federal Trade Commission (FTC) to exempt CPAs from certain provisions of its Red Flags Rule to prevent identity theft that was scheduled to go into effect Nov. 1, 2009. The Red Flags Rule, which was released Nov. 9, 2007, under the Fair and Accurate Credit Transactions Act
Mortgage Loan Fraud Reports Slow Dramatically
The Financial Crimes Enforcement Network’s semiannual SAR Activity Review: Trends, Tips & Issues says mortgage loan fraud suspicious activity reports (MLF SARs) increased less than 1% for the six-month period ended June 30, 2009, compared with the prior-year period. This is a sharp decline in the rate of increase after
Fraud
Suspicious activity reports (SARs) climbed at double-digit rates in the seven categories relating specifically to fraud in 2008, according to The SAR Activity Review— By the Numbers, Issue 12. The semiannual report by the Financial Crimes Enforcement Network (FinCEN) includes SAR filings through Dec. 31, 2008. Check fraud (17% year-to-year
Fraud
The Financial Crimes Enforcement Network (FinCEN) issued guidance to financial institutions intended to clarify the use of an information-sharing tool that resulted from section 314(b) of the USA Patriot Act. That part of the act allows participating financial institutions, upon providing notice to FinCEN, to avail themselves of a
What’s Your Fraud IQ?
Placing a sizable amount of trust in staff members is part of the cost of doing business. Trusting workers with access to information, products, vendors and funds is necessary to run an effective and efficient operation. But some employees—when faced with sufficient pressure, a perceived opportunity, and the ability to
Computer Fraud Casebook: The Bytes that Bite
edited by Joseph T. Wells, CPA, CFE John Wiley and Sons Inc., 2009, 424 pp. Writing about accounting—or computers, for that matter—often can seem clinical to the point of disembodiment. The two together could be, well, a bit dry. Joe Wells can be counted on for a good tale or
AICPA Calls for CPA Exemption From Recently Delayed Red Flags Rule
The AICPA on Tuesday asked the Federal Trade Commission (FTC) to exempt CPAs from certain provisions of its Red Flags Ruleto prevent identity theft. The current action by the AICPA follows an FTC announcement last week that it would delay enforcement of the rule until Nov. 1. The Red Flags
TIGTA Announces Program to Detect, Deter IRS Employee Misconduct
The Treasury Inspector General for Tax Administration (TIGTA) announced on Tuesday that it has reached an agreement with the IRS to conduct a program to detect and deter waste, fraud and abuse in IRS programs and operations. The purpose of the program is to protect against attempts to interfere with
Securities Class Action Filings Decline
Federal securities class action activity declined in the first half of 2009, according to a report released Monday by the Stanford Law School’s Securities Class Action Clearinghouse and Cornerstone Research. Eighty-seven federal securities class actions were filed in the first half of 2009, a 22.3% decline from the 112 filings
FinCEN Proposes Applying SAR Regs to Nonbank Lenders
The Financial Crimes Enforcement Network (FinCEN) issued an advanced notice of proposed rulemaking for public comment regarding the possible application of anti-money laundering (AML) program and suspicious activity report (SAR) regulations to nonbank residential mortgage lenders and originators. FinCEN is considering expanding the regulations to nonbanks to thwart potential criminals.
FinCEN Reports Rapid Increases in Suspected Fraud
Suspicious activity reports (SARs) climbed at double-digit rates in the seven categories relating specifically to fraud in 2008, according to The SAR Activity Review—By the Numbers, Issue 12. The semiannual report by the Financial Crimes Enforcement Network (FinCEN) includes SAR filings through Dec. 31, 2008. Check fraud (17% year-to-year increase),
Money Laundering
The Financial Crimes Enforcement Network (FinCEN) published guidance designed to enable depository institutions to more easily determine and document certain business customers’ eligibility for exemption from currency transaction reporting. The guidance is expected to ease compliance with regulatory requirements and enhance supervisory consistency. It seeks to clarify for depository
Deducting Losses for Defrauded Investors
The financial collapse of high-profile investment institutions has generated billions of dollars of losses. A recent report notes that federal and state prosecutors “are preparing for a surge of prosecutions of financial fraud.”1 A question may arise as to whether these losses for tax purposes are to be treated as
Fraud
The U.S. Government Accountability Office (GAO) is encouraging people to use its FraudNet system to report waste, fraud, abuse or mismanagement related to funds distributed under the American Recovery and Reinvestment Act of 2009. The $787 billion stimulus act was signed by President Obama on Feb. 17. FraudNet is
The State of Schemes
The Deloitte Forensic Center analyzed and reported on hundreds of SEC Accounting and Auditing Enforcement Releases (AAERs) issued from January 2000 through December 2007. The results of the analysis were compiled in the report Ten Things About Financial Statement Fraud—Second Edition, released in December of 2008. Among the findings: From
Features
FROM THIS MONTH'S ISSUE
Corporation’s officer held personally liable for its taxes
A corporate officer who facilitated an insolvent company’s transfer of assets to private creditors while knowing of an outstanding federal tax debt was held personally liable for the taxes owed.
