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| First Brands: How Exactly Did $2.3 Billion Vanish? (2264Q) |
Course CPE: 1 hour
Field(s) of Study: Auditing–1 hr
Program Level: Basic
Prerequisites: Previous training or experience with the fundamentals of accounting, finance, economics, and business writing. These individuals are often at the staff or entry level in organizations, although such programs may also benefit a seasoned professional with limited exposure to the area.
Advanced Preparation: None
Delivery Method: QAS Self-Study |
Item
Number: 26BV0330FBH
Shipping Weight: 0lbs. 0oz. |
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$99.00 |
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Recording Date: March 30, 2026
Presenter: Michael Pakter
Program Description:
This program will examine the First Brands Group bankruptcy as a real-world case study in off-balance-sheet financing, aggressive factoring practices, and forensic accounting investigation techniques. The course will focus on how factoring arrangements work, how they are properly accounted for, and how misuse or abuse of factoring can materially distort a company’s financial statements and solvency.
Participants will learn the mechanics of invoice factoring, including the differences between recourse and non-recourse arrangements, the flow of cash and customer payments, and the typical accounting and internal controls required to prevent duplicate pledging of receivables. The course will explore how factoring can be used legitimately to manage liquidity, but also how it can become a red flag when it is opaque, unusually large, or poorly controlled.
Using the reported $2.3 billion gap at First Brands, the course will highlight common forensic warning signs such as double factoring, overstated revenues, understated liabilities, weak segregation of duties, and complex intercompany structures used to obscure the true ownership of receivables. Attendees will discuss how off-balance-sheet financing can mask financial distress and delay recognition of insolvency.
The course will also address the role of forensic accountants in bankruptcy and government investigations, including tracing invoices from sale to collection, reconciling factoring proceeds, identifying duplicate or altered invoices, and evaluating whether financial statements fairly presented the company’s condition. The course will conclude with practical lessons for forensic accountants, valuation professionals, and expert witnesses when analyzing solvency, fraud risk, and financial reporting integrity in distressed companies.
Takeaways
After completing this course, attendees will be able to explain how invoice factoring and other off-balance-sheet financing arrangements operate and how they affect financial statements and cash flows. They will be able to identify red flags indicating improper or fraudulent factoring, including double factoring and understated liabilities. Attendees will be able to apply basic forensic tracing techniques to follow receivables from sale through collection and assess whether invoices were pledged more than once. They will also be able to evaluate the impact of factoring abuses on solvency analyses and bankruptcy-related financial reporting.
After completing this course, you will be able to:
- Differentiate how invoice factoring works, including the differences between recourse and non-recourse arrangements and their impact on cash flows and financial reporting
- Identify how off-balance-sheet financing structures can be used to obscure a company’s true financial condition and delay recognition of financial distress
- Recognize common red flags associated with aggressive or improper factoring, including double factoring, duplicate pledging of receivables, and weak internal controls
- Determine how improper factoring can lead to overstated revenues and assets, and understated liabilities and expenses
- Identify forensic accounting techniques to trace receivables from sale through collection to identify invoices that may have been factored more than once
- Determine the role of intercompany transactions and complex entity structures in facilitating or concealing factoring-related financial irregularities
- Determine the implications of factoring abuses on solvency analyses, bankruptcy proceedings, and creditor recoveries
- Identify the role of forensic accountants, special committees, and government investigators in uncovering financial shenanigans involving off-balance-sheet financing
For more information regarding refund or concerns, please contact our offices at (800) 677-2009.
The Consultants’ Training Institute (CTI) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org. |
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