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. b Additionally, the engagement letter presented in the meeting
allowed me to identify all the elements of the engagement. 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.
