After completing this chapter, you should understand:
• The field of forensic accounting.
• The relationship of forensic accounting and fraud investigations.
• The definition of fraud.
• Different types of fraud.
• The components of the fraud triangle.
• The utilization of ACL as a data-mining tool.
• The utilization of i2 Analyst Notebook in fraud investigations.
• An overview of a fraud examination and business investigation.
• The use of computer technology in fraud examinations/investigations.
Perhaps a client requests your help to determine whether evidence exists of vendor kickbacks to certain employees in the purchasing department. Possibly a company’s legal counsel has hired you to determine whether an officer of the company has any hidden assets as a result of an embezzlement scheme. Maybe you need to conduct background checks (due diligence checks) on potential strategic partners of a proposed joint venture. Sound like interesting assignments? These are a few examples of the value-added forensic accounting services offered by accounting firms to their clients.
The term forensic accounting is often defined as “the application of accounting principles, theories, and procedures to various facts or hypotheses at issue in some type of legal dispute.” Five elements of forensic accounting are:
1. The applicability to the courts of law,
2. The ...