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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. I was able to see first-hand the process unfold as we were
learning about it, this allowed concepts to come to life. This made concepts such as engagement
letters and documentation requirements thought provoking and provided an insight to actual forensic
accounting. Additionally, the engagement letter presented in the meeting allowed me to identify all
the elements of the engagement. z 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 behavior. Another layer of management may improve communication and oversight.
The skills about analyzing 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 analyzed, 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. I was
so intrigued with the profession. 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.
z z z z z z z z z 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. z
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. I prepare tax returns as well. z 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. 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. 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 are in compliance with GAAP standards.
The skill that I find most helpful that I learned from this class is to always be on the lookout for
potential fraud. I think that when you have studied fraud investigations, you carry that skepticism
with you forever. Knowing what could become a potential issue allows you to identify the signs
quicker and makes you a better accountant. It is our job to ensure that financial statements are
reported correctly as we are the last line of defense before the BOD or executives review it and than
includes any fraudulent activity. z Know that everyone has the potential and the opportunity to commit
fraud so it is very important that internal controls are strong and that employees feel comfortable
coming forward if they suspect any wrong doings.
These skills included gathering data and transforming data into evidence, which allows one to provide
an interpretation of the evidence so that one gains the understanding necessary to provide the
assurance to the courts or the public interest, depending on the setting. Effective data gathering as a
forensic accountant will require one to exercise professional judgment when determining the types of
data one will analyze and when determining whether the data gathered was sufficient, relevant, and
reliable. “Forensic Accountants as professionals are trained to be proficient in the use of professional
skills, core arithmetic, analytical and investigative skills, and competencies in the assessment of risk
factors that could lead to material misstatement” (N.U., & Okenwa, 2021, 451). The concepts learned
allows us to understand how to conduct an investigation and the steps needed to detect any potential
fraud or misstatements that can affect the relevance and reliability of the data reported on a company’s
financial statement. Given that I work as an Accounting Manager for a nonprofit organization, I was
able to acknowledge the importance of written reports and the need to document any details that can
potentially impact the outcome of a case or investigation. I have found myself writing up summary
reports after every meeting that I have with program directors, peers, management, and other third
parties, as it helps me document any needs or concerns that the individuals may have expressed during
our meeting. I can then always look back at these reports to serve as guidance when constructing
budgets and making revisions when necessary. “More importantly, the forensic accountant’s objective
is to provide a credible and legally sufficient communication,” as it can, “provide a comprehensive
discussion of the assignment, allowing the reader to develop a greater understanding of the data,
reasoning, and analyses leading to the opinions (conclusions) stated” (Rufus et al., 2015, 380).
When reflecting on the course, the most interesting concepts, in my view, are from real case
experiences and the theories of fraud, mainly white-collar crime and the characteristics of a fraudster.
The Fraud Diamond theory was introduced with an added condition to the Fraud Triangle: Capability.
The theory didn’t necessarily move me; however, the introduction made me think. I think capability or
incapacity used as an argument by defense attorneys, as described in our text, is something to consider
when collecting evidence or conducting an interview. (Rufus, Miller, Hahn, 2014) However, my
overall thought was it almost doesn’t make sense because capability and opportunity may be
considered the same in some regard or until one enters the physiological abyss to garnish empathy for
a defense. I find this interesting when a “typical white-collar fraudster lacks feelings of empathy”
(Rufus, Miller, Hahn, 2014).
Furthermore, it seems that consideration for incapacity would only truly be present in a sort of
confession by the subject. Also, I would debate if fraud were committed, the subject was capable
whether the subject was caught or not. Overall, I think the fraud triangle is key. Through personal
work experience, every fraudster I have encountered has encompassed every point of the fraud
triangle: pressure, opportunity, and rationalization. (Rufus, Miller, Hahn, 2014)
A new concept learned that positively resonates with me is the Scientific Approach to an Engagement
(Rufus, Miller, Hahn, 2014), encompassing the following five steps: Step 1: Define the Purpose, Step
2: Form a Hypothesis, Step 3: Gather Evidence, Step 4: Interpret Data and Refine Hypothesis, Step 5:
Draw Conclusions. (Rufus, Miller, Hahn, 2014) I think the Scientific Approach to an Engagement is a
great outline or reference to begin a project and revisit.
Leaving the term and course, I have learned a lot, new tools, and more to offer my clients. Also, with
the current high-profile fraud cases in the media, I understand what everyone is talking about and can
even fill in the blanks! Overall, I still aspire to take on investigative projects and divorce cases.
z
This was good, for although I do not want to become a fraud investigator, I now have a better
understanding behind what goes on during an investigation. I feel the fraud triangle was probably
where I came to this realization as it helps in assessing what is lacking in the controls. Usually, I
approach an audit thinking that something was misrepresented due to human error but I have become
a bit more suspicious in my work. Hopefully I do not find an administrator who is mismanaging
retiree funds, but I feel more aware none the less.
The concepts that we have studied in the course will be very useful in my career, and currently they
already are. In my department at my job, we have our external auditors that conduct an audit exam
every year. This is mainly to prepare us for our FDIC exam. They ask us specific questions to
understand our job functions, and if there are new processes that have been implemented, they want to
know. They are essentially gathering evidence to determine our final grade for the exam. It was also
interesting to learn about the different theories of crime causation and what drives a criminal to
commit a crime, better known as the fraud theory. I could use the red flags talked about in the text to
analyze if I believe a co-worker, or even a manager, is committing fraudulent acts. Lastly, I must abide
by the professional responsibilities of the accounting profession, which are “to employ the degree of
knowledge, skill, and judgment ordinarily possessed by members of the profession, to follow the
highest standards of conduct prescribed by each of the organizations to which the professional (or
firm) belongs, and to adhere to the provisions of any regulatory or licensing authority” (Rufus, Miller,
& Hahn, 2014, p. 292).
This has been an interesting class to take. I have always loved mysteries and trying to solve them. This
class was about finding out which companies have committed fraud, how they committed the fraud,
and why. I want to go into auditing which the skills I learned in this class will prepare me for. Skills
such as examining and gathering data will be relevant for ensuring companies are acting in
compliance and if not, how the financials have been affected. We also had an activity where we
learned about the factors to consider when deciding to accept or reject an assignment. This skill will
also be useful as an auditor because in some cases you would need to decide whether to accept or
reject a new client and looking at factors such as why they need a new auditor or they consistently
need a new auditor every couple years can signal that this would be a risky engagement or should be
rejected.
This has been one of my most interesting classes. I love the hunt of looking up companies and seeing
what fraud they committed, why they committed it, and what eventually happened to the company. I
have loved looking up Enron and seeing how greedy the upper management team was and how that
eventually caused the company to have to file for bankruptcy and to close down. The concepts and/or
skills learned in this class that I find most interesting and will be most useful to my professional or
personal life is the fraud triangle that was developed by Dr. Donald Cressey. The fraud triangle is
made of 3 categories: opportunity, rationalization, and financial pressures, and it explains why so
many people commit fraud. This was very interesting to me because now after further researching, I
totally agree with the findings. Having knowledge of this will allow me to make sure that I don't think
like this and allows me to help my friends and family if I feel like they might be leaning towards
making up and excuse to do something illegal.
References
Rufus, R., Miller, L., & Hahn, W. (2014, p. 292). Forensic Accounting. Pearson Education.
Rufus, R., Miller, L., & Hahn, W. (2014). Forensic accounting. Upper Saddle River, NJ: Pearson
Education.
J., N. U., & Okenwa, O. C. (2021). Effective Deploy of Digital Forensic Techniques and the
Sustenance of Material Misstatement-Free Financial Reporting in Nigeria. Journal of Academic
Research in Economics, 13(3), 442–478
Rufus, R., Miller, L., & Hahn, W. (2015). Forensic Accounting. Pearson Education, Inc.
Rufus, R. J., Miller, L. S., & Hahn, W. (2015). Forensic accounting. Pearson.
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