Current Issue
Table of Contents
- A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud
- Silencing the Truth: Fraud Detection Violence
- Financial and Non-Financial Fraud Risk Assessment
- Psychological, Emotional, and Detection Sides of a Fraud and a Fraudster—An Interview
- The Indirect Method—A Valuable Fraud Detection Tool
- The Benefits of Advanced Financial Reporting—Decision Usefulness and Speculative Evidence
- The Truth About Satyam
- Fraud Risks Associated with Recently Enacted Revenue Recognition Standard in Relation to Capitalization of Internally Generated Intangible Assets at Point of Creation
- “Say Something About Somebody’s Hat”—10 Practical Teaching and Classroom Management Tips to Consider
- Christian’s College Fund Store—A Forensic Data Analytics Case Study Using IDEA Software
- Carillion—A House Built on Sand
- SJCC Forensic Investigation Involving Internet Data
- Book Reviews
A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud | Full Article (PDF)
Carl Pacini
Nicole Forbes Stowell
Maria T. Caban-Garcia
Abstract: Healthcare costs are a significant drain on the U.S. economy, so it is of no surprise that fraudsters view healthcare as a lucrative field for illegal activity. Despite increased funding and prosecution efforts by federal and state governments, healthcare fraud continues to be a major threat to the U.S. economy and public. Healthcare fraud in the U.S. affects the government, healthcare providers, insurance companies, patients, and the public. This study examines the major federal laws used to combat healthcare fraud and discusses what types of evidence to collect to prove each element of the healthcare offenses examined. This article is a useful resource for forensic accountants, healthcare regulators, law enforcement officials, healthcare fraud investigators, criminologists, physicians, hospital administrators, health insurers, and the public to help combat healthcare fraud and prevent financial losses.
Keywords: Healthcare fraud: Anti-kickback statute; Stark Law; Federal False Claims Act; Health Insurance Portability and Accountability Act; unjust enrichment; payment by mistake; mail fraud; wire fraud; false statements to obtain health benefits
Back to Top
Silencing the Truth: Fraud Detection Violence | Full Article (PDF)
Frank S. Perri
Richard G. Brody
Abstract: Common positions held by academic and non-academic professional groups pertaining to the white-collar crime offender profile are that they are non-violent. Yet research has unveiled a subgroup of white-collar offenders who are violent, referred to as red-collar criminals, in that their motive to resort to violence as a solution is to prevent the detection and or disclosure of their fraud schemes. Forensic accountants and auditors must be aware that there are risk factors inherent in their occupations that includes violence. Within this article, we learn that red-collar criminals are not an anomaly to ignore simply because they may not reflect the street-level violence typically observed by society, investigated by law enforcement, and studied by academicians.
Moreover, it is important to debunk the myth of the out-of-character offender profile that lends itself to distorting the image of what white-collar offenders represent impacting how we assess risk factors that expose antifraud professionals to becoming their victims. Case studies are offered together with profiling violence methods used by these offenders, the importance of understanding the risk of bias in an investigative planning phase, the criminal thinking patterns displayed by violent fraud offenders, coupled with suggestions to help mitigate the risks of becoming a victim.
Keywords: Violent white-collar criminals; fraud detection violence; red-collar crime
Back to Top
Financial and Non-Financial Fraud Risk Assessment | Full Article (PDF)
Hugh Grove
Mac Clouse
Abstract: Management and Boards of Directors should proactively undertake fraud risk assessment to gain a comprehensive understanding of the threats facing their organizations and then design programs to respond to those specific risks. The research question and major purpose of this article is to analyze and identify major types of fraud that occurred in the 21st Century in order to develop forensic procedures for fraud risk assessment (FRA) teams of management and Boards of Directors to use. The fraud analysis uses well-known models and ratios for fraud prediction and risk assessment.
The frauds by 21 companies in the 21st Century were so significant that they caused $1.58 trillion in market capitalization destruction or losses for investors. The problem is that there was no formal fraud risk assessment of these companies by management and Boards of Directors who did not act as gatekeepers to protect their investors from such major frauds. Instead, as Warren Buffett, the Berkshire Hathaway CEO, has recommended, these investors should just have invested in an S&P 500 Index fund as the S&P 500 Index increased from 1,469 on January 1, 2000 to 3,427 on September 5, 2020—an increase of 133% in the 21st Century. A fraud risk assessment team should be established by management and the Board of Directors’ audit committee. Such a team is especially important when a “black swan” event, like the coronavirus pandemic, occurs which may motivate management to manage earnings or even commit fraud to support its stock price.
Keywords: Fraud risk assessment; non-financial fraud; cybersecurity; M&A; brainstorming; best practices; major frauds; revenue recognition; expense deferrals; risky investments; red flags
Back to Top
Psychological, Emotional, and Detection Sides of a Fraud and a Fraudster—An Interview | Full Article (PDF)
D. Larry Crumbley
Vernon Beck
Abstract:The purpose of this interview of an executive fraudster is to determine why and how the fraud was accomplished and search for the psychological, emotional, consequences, and detection aspect of a major embezzlement. White collar crime is increasing, and executive fraud can be more damaging than outsider fraud. An executive and a phantom service-type vendor co-conspirator can steal a significant amount of money with an appropriately sounding company name using only a cell phone, with no web page, landline, e-mail, or fax. Some factors that are helpful for a long- term fraud are a privately-held (or closely-owned) entity, lack of a master vendor file, an inexperienced auditor, no conflict of interest statement and conflict of interest audit, a confident and aggressive executive with limited internal controls, lack of an internal audit department and audit committee, few lifestyle changes, and avoiding spousal knowledge.
A white-collar criminal can be rehabilitated and accepting responsibility for the crime and returning a significant portion of the embezzled funds can reduce prison time. A country club prison is still dangerous, and the consequences in prison and afterward can be quite harmful. All frauds do not necessarily follow the fraud triangle or diamond because he or she may start the fraud to help someone else. The fraudster may not be happy with the stolen money, may rationalize by “gifting money” to others, may be happy with the employer, and health may be adversely affected.
Keywords: Embezzlement; vendor fraud; co-operation; sentencing guidelines; country club prison conditions; emotional and financial impacts; separation of duties; lack of controls; inexperienced auditors.
Back to Top
The Indirect Method—A Valuable Fraud Detection Tool | Full Article (PDF)
Michael Dugan
Gary Taylor
Abstract: This research provide a teaching tool to aid in the calculation of the indirect method of cash flows and then provides examples of how cash flow ratios can be useful in the preliminary identification of fraudulent activity. Academics (in the classroom) and practitioners (firm training) can use the first part of this article to discuss the preparation of operating cash flows as a reconciliation between net income and cash generated through operations. The authors discuss the year-over-year changes in the cash flow margin ratio and net income to operating cash flows for HealthSouth during their accounting scandal. They discuss specific reconciliations contained within HealthSouth’s statement of cash flows that may have been of interest to the auditor or fraud auditor. They also discuss the use of two ratios in the preliminary identification of the recording of fraudulent sales or the theft of cash.
Keywords: Indirect methods of cash flows; cash flows from operating activities; fraud; fraud detection tools
Back to Top
The Benefits of Advanced Financial Reporting—Decision Usefulness and Speculative Evidence | Full Article (PDF)
Andreas Hecht
Dirk Hachmeister
Abstract: Terms such as ‘information overload’ or ‘disclosure problem’ characterize the ongoing debate about improving financial market communication. This discussion is not only about reducing the flood of information in corporate reporting, but also about the lack of relevant information for the addressees of public disclosures. The objective of international standard setters is to enhance the decision usefulness of financial statements. A look at the unique environment of France shows how a recommendation on corporate reporting initiated by the Financial Markets Authority leads to more relevant information for various stakeholders and thus effectively increases the decision usefulness for the addressees. Furthermore, the authors find that the advanced financial reporting allows the identification of speculative activities based on public corporate disclosures, which can reduce fraud risk in the realm of financial risk management.
Keywords: Advanced financial reporting; disclosure problem; speculation; forensic accounting; fraud
Back to Top
The Truth About Satyam | Full Article (PDF)
Vasant Raval
Vivek Raval
Abstract:The primary purpose of this article is to distill the Satyam episode into a holistic understanding of the founder-led corporate financial fraud. Using the disposition-based fraud model (DFM) as the lens, the authors dissect the incident to provide a holistic understanding of drivers of the financial fraud at Satyam. Their analysis demonstrates that the use of the DFM guides implications of the Satyam fraud. An inquiry using the DFM suggests that the understanding of the human side of fraud is at best minimal and potentially deserves a deeper look. Specifically, they propose that those in charge of governance should pay attention to the disposition of company leaders, because self-regarding disposition of the executive is vulnerable to indulgence in a moral compromise, leading to financial fraud. Additionally, they discuss the interplay of controls or obstacles to fraud, with the fraudster’s self-efficacy in the Satyam fraud.
Keywords: Financial fraud; Satyam; disposition-based fraud model; self-regarding disposition
Back to Top
Fraud Risks Associated with Recently Enacted Revenue Recognition Standard in Relation to Capitalization of Internally Generated Intangible Assets at Point of Creation | Full Article (PDF)
Rossen Petkov
Abstract: The author explores the underlying fraud risks associated with the recently enacted revenue recognition standard in relation to capitalization of internally generated intangibles at a point of creation. This revenue recognition standard creates an opportunity for companies to engage in cost transferring scheme of internally generated intangibles to outside entities (at the point of creation), under a controlled shifting transaction. Under the proposed scheme, companies can mimic an external purchase with a third party, and this would allow to restructure expendable intangible costs on the balance sheet as an asset. As such, this scheme provides the necessary ‘accounting vehicle’ for companies to record the unrecordable internally generated intangibles on the balance sheet. In this paper, we highlight this scheme and the fraud risks it carries. In addition, there is recommended course of action to correct or mitigate such risks of engaging in such scheme. This includes, but are not limited to, informing companies about these potential risks and proper procedures to address these risks.
Keywords: Internally generated intangible; revenue recognition; fraud; cost shifting scheme
Back to Top
“Say Something About Somebody’s Hat”—10 Practical Teaching and Classroom Management Tips to Consider | Full Article (PDF)
Dana R. Hermanson
Heather M. Hermanson
Abstract: This essay provides younger faculty, doctoral students, and practitioners serving in part-time teaching roles with 10 practical teaching and classroom management tips to consider. The authors organize their thoughts into three areas, which address many aspects of the elements of teaching effectiveness developed by Wygal and Stout (2015), as well as some additional items. They discuss connection and people issues, organization and substance issues, and expanding the classroom to include research, current events, and professional and life management insights. The primary contribution of the essay is to illustrate, in practical terms, how they have worked over the past approximately 50 classroom-years to try to be effective teachers, primarily in the areas of forensic accounting, fraud, governance, auditing, and financial accounting.
Keywords: Teaching tips; teaching effectiveness; student evaluation of teachers
Back to Top
Christian’s College Fund Store—A Forensic Data Analytics Case Study Using IDEA Software | Full Article (PDF)
David C. Hayes
James H. Irving
Michael P. Johnson
Abstract: Forensic investigators and auditors often evaluate datasets for trends and anomalies in an effort to identify risks, deficiencies in internal controls, and evidence of fraudulent activities. This case study provides an educational case where students learn and apply numerous forensic data analytics and file interrogation skills, including control totals, extractions, detection of duplicates and gaps, and Benford’s Law. Initially, students become familiar with 17 skills using a workbook and training videos provided by CaseWare International’s IDEA software. Students then complete a case where they further develop their skill level using IDEA, applying what they learned in the workbook to real-world situations. After completing the project, students reported a substantially increased level of proficiency across all skills compared to the level of proficiency obtained by completing just the workbook.
Keywords: Data analytics; forensic accounting; IDEA software; AACSB Accreditation Standard A5; case study
Back to Top
Carillion—A House Built on Sand | Full Article (PDF)
Paul M. Clikeman
Jen Zimmerman
Abstract: This teaching case, which is appropriate for undergraduate or masters-level financial auditing courses, describes Carillion Plc, a British construction company that was liquidated in January 2018, shortly after recording a £1,045 million impairment charge to correct overvalued contract revenues and goodwill. A Parliamentary committee that investigated the scandal recommended significant changes to the U.K. audit industry. Completing this case study will help auditing students (1) identify risk factors related to fraudulent financial reporting, (2) identify appropriate procedures for testing accounting estimates, (3) understand the negative consequences of inaccurate financial reporting, (4) evaluate practices that may impair auditor independence, and (5) assess the potential benefits and costs of mandatory audit firm rotation.
Keywords: Risk assessment; auditing estimates; auditor independence; auditor rotation
Back to Top
SJCC Forensic Investigating Involving Internet Data | Full Article (PDF)
George R. Aldhizer, III
Cynthia Hetherington
Abstract: This case study involves the complexities of a Seattle-based ferry and yacht-chartering service organization whose owner suspects that a competitor is stealing a substantial portion of his client base through a mole inside his company. The principal requirement is for students to identify red flags or indicators for potential fraud involving the primary suspect and potential co-conspirators’ social media postings, online public records, and to a lesser extent organizational network data. Prior published forensic and auditing cases have focused primarily on analyzing financial accounting data such as sales and purchasing records for indications of potential fraud.
Although representing crucial documentary forensic evidence, traditional accounting data no longer represents the majority of all relevant data available to an investigator. This case study primarily focuses on analyzing Internet data that represents a substantial, relatively untapped source of critical intelligence available for analysis by leading forensic investigators. This case should enhance students’ ability to analyze Internet data for promising evidence to help build a successful case against a likely suspect and co-conspirators. Investigative report writing also is emphasized to address recruiters’ concern that new hires lack effective written communication skills.
Keywords: E-mail; investigative report; Internet data; social media; online public records.
Back to Top
Carl Pacini
Nicole Forbes Stowell
Maria T. Caban-Garcia
Abstract: Healthcare costs are a significant drain on the U.S. economy, so it is of no surprise that fraudsters view healthcare as a lucrative field for illegal activity. Despite increased funding and prosecution efforts by federal and state governments, healthcare fraud continues to be a major threat to the U.S. economy and public. Healthcare fraud in the U.S. affects the government, healthcare providers, insurance companies, patients, and the public. This study examines the major federal laws used to combat healthcare fraud and discusses what types of evidence to collect to prove each element of the healthcare offenses examined. This article is a useful resource for forensic accountants, healthcare regulators, law enforcement officials, healthcare fraud investigators, criminologists, physicians, hospital administrators, health insurers, and the public to help combat healthcare fraud and prevent financial losses.
Keywords: Healthcare fraud: Anti-kickback statute; Stark Law; Federal False Claims Act; Health Insurance Portability and Accountability Act; unjust enrichment; payment by mistake; mail fraud; wire fraud; false statements to obtain health benefits
Back to Top
Frank S. Perri
Richard G. Brody
Abstract: Common positions held by academic and non-academic professional groups pertaining to the white-collar crime offender profile are that they are non-violent. Yet research has unveiled a subgroup of white-collar offenders who are violent, referred to as red-collar criminals, in that their motive to resort to violence as a solution is to prevent the detection and or disclosure of their fraud schemes. Forensic accountants and auditors must be aware that there are risk factors inherent in their occupations that includes violence. Within this article, we learn that red-collar criminals are not an anomaly to ignore simply because they may not reflect the street-level violence typically observed by society, investigated by law enforcement, and studied by academicians.
Moreover, it is important to debunk the myth of the out-of-character offender profile that lends itself to distorting the image of what white-collar offenders represent impacting how we assess risk factors that expose antifraud professionals to becoming their victims. Case studies are offered together with profiling violence methods used by these offenders, the importance of understanding the risk of bias in an investigative planning phase, the criminal thinking patterns displayed by violent fraud offenders, coupled with suggestions to help mitigate the risks of becoming a victim.
Keywords: Violent white-collar criminals; fraud detection violence; red-collar crime
Back to Top
Hugh Grove
Mac Clouse
Abstract: Management and Boards of Directors should proactively undertake fraud risk assessment to gain a comprehensive understanding of the threats facing their organizations and then design programs to respond to those specific risks. The research question and major purpose of this article is to analyze and identify major types of fraud that occurred in the 21st Century in order to develop forensic procedures for fraud risk assessment (FRA) teams of management and Boards of Directors to use. The fraud analysis uses well-known models and ratios for fraud prediction and risk assessment.
The frauds by 21 companies in the 21st Century were so significant that they caused $1.58 trillion in market capitalization destruction or losses for investors. The problem is that there was no formal fraud risk assessment of these companies by management and Boards of Directors who did not act as gatekeepers to protect their investors from such major frauds. Instead, as Warren Buffett, the Berkshire Hathaway CEO, has recommended, these investors should just have invested in an S&P 500 Index fund as the S&P 500 Index increased from 1,469 on January 1, 2000 to 3,427 on September 5, 2020—an increase of 133% in the 21st Century. A fraud risk assessment team should be established by management and the Board of Directors’ audit committee. Such a team is especially important when a “black swan” event, like the coronavirus pandemic, occurs which may motivate management to manage earnings or even commit fraud to support its stock price.
Keywords: Fraud risk assessment; non-financial fraud; cybersecurity; M&A; brainstorming; best practices; major frauds; revenue recognition; expense deferrals; risky investments; red flags
Back to Top
D. Larry Crumbley
Vernon Beck
Abstract:The purpose of this interview of an executive fraudster is to determine why and how the fraud was accomplished and search for the psychological, emotional, consequences, and detection aspect of a major embezzlement. White collar crime is increasing, and executive fraud can be more damaging than outsider fraud. An executive and a phantom service-type vendor co-conspirator can steal a significant amount of money with an appropriately sounding company name using only a cell phone, with no web page, landline, e-mail, or fax. Some factors that are helpful for a long- term fraud are a privately-held (or closely-owned) entity, lack of a master vendor file, an inexperienced auditor, no conflict of interest statement and conflict of interest audit, a confident and aggressive executive with limited internal controls, lack of an internal audit department and audit committee, few lifestyle changes, and avoiding spousal knowledge.
A white-collar criminal can be rehabilitated and accepting responsibility for the crime and returning a significant portion of the embezzled funds can reduce prison time. A country club prison is still dangerous, and the consequences in prison and afterward can be quite harmful. All frauds do not necessarily follow the fraud triangle or diamond because he or she may start the fraud to help someone else. The fraudster may not be happy with the stolen money, may rationalize by “gifting money” to others, may be happy with the employer, and health may be adversely affected.
Keywords: Embezzlement; vendor fraud; co-operation; sentencing guidelines; country club prison conditions; emotional and financial impacts; separation of duties; lack of controls; inexperienced auditors.
Back to Top
Michael Dugan
Gary Taylor
Abstract: This research provide a teaching tool to aid in the calculation of the indirect method of cash flows and then provides examples of how cash flow ratios can be useful in the preliminary identification of fraudulent activity. Academics (in the classroom) and practitioners (firm training) can use the first part of this article to discuss the preparation of operating cash flows as a reconciliation between net income and cash generated through operations. The authors discuss the year-over-year changes in the cash flow margin ratio and net income to operating cash flows for HealthSouth during their accounting scandal. They discuss specific reconciliations contained within HealthSouth’s statement of cash flows that may have been of interest to the auditor or fraud auditor. They also discuss the use of two ratios in the preliminary identification of the recording of fraudulent sales or the theft of cash.
Keywords: Indirect methods of cash flows; cash flows from operating activities; fraud; fraud detection tools
Back to Top
Andreas Hecht
Dirk Hachmeister
Abstract: Terms such as ‘information overload’ or ‘disclosure problem’ characterize the ongoing debate about improving financial market communication. This discussion is not only about reducing the flood of information in corporate reporting, but also about the lack of relevant information for the addressees of public disclosures. The objective of international standard setters is to enhance the decision usefulness of financial statements. A look at the unique environment of France shows how a recommendation on corporate reporting initiated by the Financial Markets Authority leads to more relevant information for various stakeholders and thus effectively increases the decision usefulness for the addressees. Furthermore, the authors find that the advanced financial reporting allows the identification of speculative activities based on public corporate disclosures, which can reduce fraud risk in the realm of financial risk management.
Keywords: Advanced financial reporting; disclosure problem; speculation; forensic accounting; fraud
Back to Top
Vasant Raval
Vivek Raval
Abstract:The primary purpose of this article is to distill the Satyam episode into a holistic understanding of the founder-led corporate financial fraud. Using the disposition-based fraud model (DFM) as the lens, the authors dissect the incident to provide a holistic understanding of drivers of the financial fraud at Satyam. Their analysis demonstrates that the use of the DFM guides implications of the Satyam fraud. An inquiry using the DFM suggests that the understanding of the human side of fraud is at best minimal and potentially deserves a deeper look. Specifically, they propose that those in charge of governance should pay attention to the disposition of company leaders, because self-regarding disposition of the executive is vulnerable to indulgence in a moral compromise, leading to financial fraud. Additionally, they discuss the interplay of controls or obstacles to fraud, with the fraudster’s self-efficacy in the Satyam fraud.
Keywords: Financial fraud; Satyam; disposition-based fraud model; self-regarding disposition
Back to Top
Rossen Petkov
Abstract: The author explores the underlying fraud risks associated with the recently enacted revenue recognition standard in relation to capitalization of internally generated intangibles at a point of creation. This revenue recognition standard creates an opportunity for companies to engage in cost transferring scheme of internally generated intangibles to outside entities (at the point of creation), under a controlled shifting transaction. Under the proposed scheme, companies can mimic an external purchase with a third party, and this would allow to restructure expendable intangible costs on the balance sheet as an asset. As such, this scheme provides the necessary ‘accounting vehicle’ for companies to record the unrecordable internally generated intangibles on the balance sheet. In this paper, we highlight this scheme and the fraud risks it carries. In addition, there is recommended course of action to correct or mitigate such risks of engaging in such scheme. This includes, but are not limited to, informing companies about these potential risks and proper procedures to address these risks.
Keywords: Internally generated intangible; revenue recognition; fraud; cost shifting scheme
Back to Top
Dana R. Hermanson
Heather M. Hermanson
Abstract: This essay provides younger faculty, doctoral students, and practitioners serving in part-time teaching roles with 10 practical teaching and classroom management tips to consider. The authors organize their thoughts into three areas, which address many aspects of the elements of teaching effectiveness developed by Wygal and Stout (2015), as well as some additional items. They discuss connection and people issues, organization and substance issues, and expanding the classroom to include research, current events, and professional and life management insights. The primary contribution of the essay is to illustrate, in practical terms, how they have worked over the past approximately 50 classroom-years to try to be effective teachers, primarily in the areas of forensic accounting, fraud, governance, auditing, and financial accounting.
Keywords: Teaching tips; teaching effectiveness; student evaluation of teachers
Back to Top
Christian’s College Fund Store—A Forensic Data Analytics Case Study Using IDEA Software | Full Article (PDF)
David C. Hayes
James H. Irving
Michael P. Johnson
Abstract: Forensic investigators and auditors often evaluate datasets for trends and anomalies in an effort to identify risks, deficiencies in internal controls, and evidence of fraudulent activities. This case study provides an educational case where students learn and apply numerous forensic data analytics and file interrogation skills, including control totals, extractions, detection of duplicates and gaps, and Benford’s Law. Initially, students become familiar with 17 skills using a workbook and training videos provided by CaseWare International’s IDEA software. Students then complete a case where they further develop their skill level using IDEA, applying what they learned in the workbook to real-world situations. After completing the project, students reported a substantially increased level of proficiency across all skills compared to the level of proficiency obtained by completing just the workbook.
Keywords: Data analytics; forensic accounting; IDEA software; AACSB Accreditation Standard A5; case study
Back to Top
Carillion—A House Built on Sand | Full Article (PDF)
Paul M. Clikeman
Jen Zimmerman
Abstract: This teaching case, which is appropriate for undergraduate or masters-level financial auditing courses, describes Carillion Plc, a British construction company that was liquidated in January 2018, shortly after recording a £1,045 million impairment charge to correct overvalued contract revenues and goodwill. A Parliamentary committee that investigated the scandal recommended significant changes to the U.K. audit industry. Completing this case study will help auditing students (1) identify risk factors related to fraudulent financial reporting, (2) identify appropriate procedures for testing accounting estimates, (3) understand the negative consequences of inaccurate financial reporting, (4) evaluate practices that may impair auditor independence, and (5) assess the potential benefits and costs of mandatory audit firm rotation.
Keywords: Risk assessment; auditing estimates; auditor independence; auditor rotation
Back to Top
SJCC Forensic Investigating Involving Internet Data | Full Article (PDF)
George R. Aldhizer, III
Cynthia Hetherington
Abstract: This case study involves the complexities of a Seattle-based ferry and yacht-chartering service organization whose owner suspects that a competitor is stealing a substantial portion of his client base through a mole inside his company. The principal requirement is for students to identify red flags or indicators for potential fraud involving the primary suspect and potential co-conspirators’ social media postings, online public records, and to a lesser extent organizational network data. Prior published forensic and auditing cases have focused primarily on analyzing financial accounting data such as sales and purchasing records for indications of potential fraud.
Although representing crucial documentary forensic evidence, traditional accounting data no longer represents the majority of all relevant data available to an investigator. This case study primarily focuses on analyzing Internet data that represents a substantial, relatively untapped source of critical intelligence available for analysis by leading forensic investigators. This case should enhance students’ ability to analyze Internet data for promising evidence to help build a successful case against a likely suspect and co-conspirators. Investigative report writing also is emphasized to address recruiters’ concern that new hires lack effective written communication skills.
Keywords: E-mail; investigative report; Internet data; social media; online public records.
Back to Top
Corporate Law and the Theory of the Firm: Reconstructing Corporations, Shareholders, Directors, Owners, and Investors