This class was interesting especially because I was invited to sit in on my company’s end of the year
audit by the external auditing company. c I was able to see first-hand the process unfold as we were
learning about it, this allowed concepts to come to life. c This made concepts such as engagement
letters and documentation requirements thought provoking and provided an insight to actual
forensic accounting. c Additionally, the engagement letter presented in the meeting allowed me to
identify all the elements of the engagement. c Meanwhile, this class aided me in gathering the
required documents for the audit such as bank statements and journal entries.
Furthermore, the in-depth look at the fraud triangle and the AICPA code of conduct provided me
with resources for the future. These resources will provide the appropriate information for my
personal and professional life. Furthermore, the investigation of the company for the final project
provided real life scenarios to better assist in the decision making in the future.
This has been a very interesting and enjoyable class to take. Before coming into this class, I had no
prior knowledge of Forensic Accounting, but I feel like I have gained a good understanding of some
concepts that may be beneficial in the future. There were so many concepts, but one of the
concepts that I found most interesting is the fraud triangle and how it helps explain the reasoning
behind someone’s decision to commit fraud. We learned that fraud takes place when three
elements are present--pressure, opportunity, and rationalization. We can help prevent fraud by
addressing these elements. I have used this information to educate my co-workers about the
‘opportunity’ element and why we practice things like separation of duties and documentation. I
also find myself thinking of how we could improve the management structure. Right now, the
company has only 2 levels of management and there is a lot of ambiguity within the company which
could be an environment for fraudulent behaviour. Another layer of management may improve
communication and oversight.
The skills about analysing a company’s balance sheet and income statement. Because the income
statement and balance sheet are interconnected, I can look for unusual relationships that may
indicate issues (example: if revenues increased on the income statement, but cash and receivables
decreased on the balance sheet, this may be a red flag). Or financial ratios can be analysed, such as
return on equity, or debt-to-equity.
I have always met individuals who were either in tax, audit, or general accounting. I attended an
accounting conference about 15 years ago and sat in a presentation about forensic accounting. c I
was so intrigued with the profession. c However, I felt that since I have been in general accounting for
a while that it would have been hard to transition into forensic accounting.
The concept that I enjoyed the most was conducting a fraud investigation. It gave an overview of the
engagement as well as the different phases. It moves on to discuss the reasonableness of fraud. c The
concept that will be most useful in my personal life is the chapter on professional responsibilities.
This topic is relevant for all careers and areas of life. As an accountant there are code of conducts
that we must follow in our career. c I prepare tax returns as well. c I must have professional
competence and due professional care and keep up with the tax laws so that I am providing my
clients with the best service possible. I also must have confidently with clients’ information. I have
access to individual’s social security number as well as their dependents and spouses. c In addition, I
do not provide return information to client’s families including their spouses if they are filing
separately. I leave that up to the client’s to share their own information if they choose.
There were many concepts and skills Found truly interesting was Cressey’s Fraud theory. c The theory
being that a “violation of trust (fraud) occurs when the position of trust (opportunity) is viewed by
the trusted person as a rational means (solution) to solve a non-shareable problem (pressure)”
(Rufus, 2015, pg. 149). Being able to understand the different sides of the triangle such as pressure,
opportunity, and rationalization is something I will quite literally need to take with me going into my
field. Recently, we have seen a surge of financial statements that seem dubious and could warrant
the need to implement the fraud theory to understand who, why and how they committed the
fraud. The way that the economy is heading, auditors will be needed more than ever to ensure that
companies and institutions follow GAAP standards.
References
Rufus, R. J., Miller, L. S., & Hahn, W. (2015). Forensic accounting. Pearson.
