Statistical Techniques for Forensic Accounting: Understanding the Theory and Application of Data Analysis

1. Introduction: The Challenges in Forensic Accounting

I spent about ten years exposing corporate and financial fraud for Barron’s magazine, and I found a lot to write about.

—Ben Stein

1.1. Introduction

Investigating corporate fraud cases is one of the highest priorities of the United States Federal Bureau of Investigation (FBI). At the end of 2011, 726 fraud cases were being actively investigated by various FBI field offices throughout the U.S.,¹ which was an approximately 10% increase from the number of cases being pursued at the end of 2010 and a 37% increase over a five-year period. It is estimated that several of these cases resulted in losses to investors exceeding $1 billion.

In response to the growing importance of accounting investigative ...