As a forensic accountant, you will have many areas of fraud that you
can be looking at. This is one part of determining what data you will
analyse. If you are looking at financial statement fraud, you will
analyse the data used to create the financial statements such as sales
registers, purchasing registers, etc. a If you are looking at tax fraud,
you are going to want to look at income statements, expenses
created that could be used to reduce the taxable amount,
documentation on deductions, etc. a You also want to review bank
statements to see if there are any weird transfers of money to
accounts vendors that are not known or used.
To ensure you have reliable data, you must find secondary sources to
confirm the amounts listed such as AR or bank confirmations. a You
need some sort of outside source to help back up the data being
provided. a You should run through the internal controls and reach out
to several employees to test the controls as this would help prevent
fraud and give you assurance that the data is reliable.
Before the forensic accountant can start collecting data, they must
first identify the type of fraud case they are facing within the
engagement and what industry is involved. For example, cases of
insurance fraud may call for a different type of evidence than credit
card fraud. Once you have established the kind of fraud, the type of
evidence necessary to crack to the case will become easier to
identify. The forensic accountant must also identify which of the four
common types of data sources are necessary in the case: first-party,
second-party, third-party, and/or fourth party. First-party data would
be the use of interviews, because these come directly from the
source these are considered to be the most relevant. Next, the
second-party data is data collected from a related party. Bank
statements are considered to be third-party data and can also be
considered to be reliable. Lastly, the fourth-party data are sources
used for reference. In order for evidence to be sufficient, relevant,
and reliable it must support the claim(s) and expert opinions
presented in the engagement and afford a reasonable basis for a
conclusion.
Robert Rufus, L. M. (2015). Transforming Data into Evidence (Part 1).
In L. M. Robert Rufus, Forensic Accounting 1st Edition. Pearson
Education.
