How Forensic Accountants and Business Valuation Professionals Can Give AI a “Run for its Money” As AI proliferates, business valuation and forensic accountants will need to distinguish between human-authored and AI assisted/generated content. Significantly, AI generated content, as of the date of writing, is not accurate. In this article, the author examines what the above will mean to forensic accountants and business valuation analysts. With the rise of content generated by artificial intelligence (AI), it makes sense that there would also be an increase in online tools that can detect AI-generated content. What does this mean for professionals in the…
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Using Forensic Accounting Skills to Your Advantage When valuing a business, one essential step in the process is to review and analyze the subject company’s historical financial information. This information allows a business valuator to analyze the company’s past performance and pinpoint trends in the business to forecast its future performance. The author in this article shares his opinion regarding items that a business valuator may encounter in an engagement that merit normalization. When valuing a business, one essential step in the process is to review and analyze the subject company’s historical financial information. This information allows a business valuator…
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in Inventory Loss Claims Insurance claims for loss of inventory are generally examined by insurance carriers. The carrier will retain a forensic accountant who has the ability to quantify out of sight inventory losses. Out of sight inventory losses occur when the accountant is not able to physically count the damaged inventory. These types of inventory losses include, but are not limited to, damage from fires, floods, and theft. This paper focuses on the two significant, but different, roles forensic accountants play in quantifying the inventory loss and how—in the normal course of the analysis—they may find instances of fraud…
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Using Forensic Accounting Valuing the small business is how most valuators earn their living. These small businesses pose as much issues to valuation professionals as they do for tax, accounting, and legal professionals by providing these entities with advice. The issues are wide-ranging, and the purpose of this article is not to patronize small business owners; rather, the purpose of this article is to discuss the challenges we in the valuation community face when valuing small businesses and how forensic accounting techniques can help. [su_pullquote align=”right”]Resources: Forensic Accounting Academy Forensic Accounting Specialty Webinars Forensic Accounting Techniques in Business Appraisals Financial…
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A Forensic Accountant’s Process The purpose of this article is to explain how forensic accountants look at the big picture, both financially and by understanding past behaviors, to uncover items that may help you or your client. The author shares that some of his biggest “wins” in fraud investigations started with broad allegations; however, the techniques used to identify and quantify these allegations were what really lead the author to success. [su_pullquote align=”right”]Resources: Forensic Accounting Academy© Forensic Accounting Specialty Webinars Fraud Deterrence And Fraud Detection Introduction To Fraud Risk Management[/su_pullquote] I have conducted hundreds of investigations involving allegations of fraud…
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Analysis in Matrimonial Matters As forensic accountants, we may be called upon to determine the value of the marital estate. Frequently, we either receive an avalanche of documents or very few documents. How do we distinguish what is valuable versus what is not? Why is the information so important in our forensic analysis of the case? In this article, the author answers these questions and shares her experience.
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Engage and Assist Legal Counsel It is critical that the right person with the right expertise, training, and background be selected. This article will describe the various areas of specialization in which a forensic accountant performs, how counsel should select the right professional for the job, and the benefits of using a forensic accountant.
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Can Effect the Outcome of a Case One of the most critical decisions practicing attorneys have to face is the selection of a forensic accountant. The specialized training and expertise of forensic accountants and the role they play, either as consultants or as expert witnesses, can make the difference in the final outcome of a case. However, it is critical that the right person with the right expertise, training, and background be selected. This article will describe the various areas of specialization in which a forensic accountant performs, how to select the right professional for the job, and the benefits…
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on Business Valuations in Litigation In this article, Paul Fullerman, CPA, CVA, discusses techniques which can assist the accredited valuation professionals performing a business valuation.
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As a Fraud Deterrence Tool Trained forensic professionals investigate accounting and financial transactions that are, or will become, subject to legal proceedings. It is an early step in a potential war, and many times it is the first shot. Attorneys and c-level executives are often not familiar with forensic techniques and see it as a means to quantify a loss. Financial forensics also provides a means to deter and detect fraud. In this article, I share my views on the value of forensic techniques used to deter fraud.
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Corporations globally are faced with the complex problem of corruption, states Ravi Venkatesan in “Confronting Corruption” in McKinsey Quarterly. It takes many forms, and perpetrators are skilled in developing new ways to be corrupt and cover their tracks. In corporations, there are multiple types of corruption, including bribes, extortion, speed money, and employee fraud. The first steps into anti-corruption can be daunting and policies, controls, and culture together must be considered to fight and resolve the problem. To read the full article, click here.
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Simple Steps to Save Hundreds of Thousands of Dollars By implementing just a few simple steps and procedures, business owners can catch or prevent financial fraud that can have devastating financial and personal consequences. In this article, Chris Hamilton outlines six simple steps business owners can put into practice today.
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According to the Global State of Information Security Survey 2015 sponsored by PwC, the total number of reported cyber security breaches reported this year jumped 48 percent totaling 42.8 million new occurrences. That’s equivalent to 117,339 successful security attacks happenings per day. In addition, the compounded annual growth rate of detected security breaches has increased by 66 percent every year since 2009. Contributing to the problem is the fact that overall, allotted funds for security measures have been frozen at just 4 percent or less than the average IT budget for the last five years. Large corporations with revenue of…
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The PCAOB recently issued Auditing Standard (AS) No. 18, Related Parties to strengthen auditor performance in the high-risk areas of significant unusual transactions and financial relationships, and transactions with executive officers. The change comes as the result of an internal review where the PCAOB felt the existing protocol did not contain sufficient procedures and was not properly risk-based. Auditors are now required to perform specific procedures to determine the nature of a company’s relationships and transactions with the related parties. How a company identifies these relationships and transactions, including authorization and approval, is now seen as a significant aspect…
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Limiting the potential for abuse and delay Discovery can reduce the costs of litigation, but it can also be used to harass and delay. There are a number of things that counsel and a forensic professional can do to limit the misuse of the discovery process, save costs, and lead to a settlement.
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The Public Company Accounting Oversight Board (PCAOB) has beefed up its requirement for auditors to clarify the nature of relationships and transactions between related parties. The new standards were instituted by the PCAOB to counteract a number of factors that it felt were contributing to financial fraud. Ultimately, the intention is to help companies avoid financial failure and reduce harm to investors. To review the three key areas the PCAOB is stressing in its revised standard, please visit Goingconcern.com. [button color=”blue” link=”http://goingconcern.com/post/pcaob-adopts-auditing-standard-no-18-crony-disclosures” target=”_blank” font=”arial” align=”left”]Read Full Article[/button]
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Forensic professionals endure trench warfare Discovery provides a window of opportunity to gather evidence and develop expert reports. A trained forensics professional can ascertain whether cash deposits were all accounted for or secreted. It is advisable and well worth the time, trouble, and money to retain a forensic professional to conduct an analysis.
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Use of photography in forensic and valuation engagements The purpose of this article is to provide the CPA/expert a brief introduction to the use of photography in a valuation or forensic engagement. It is not intended to be an all-inclusive training manual in forensic photography. Criminal forensic photographic procedures may, due to the differences between civil and criminal law, be materially different.
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In a recent Grant Thornton survey, more than two thirds (69 percent) of internal audit professionals say they’d love to focus on strategic risks, but regulatory compliance duties and the rising costs they incur are getting in the way. An additional 36 percent said these obstacles prevent resources from being allocated to higher-value priorities. Since almost the beginning of the recent financial global crisis, many industries have seen a sharp rise in regulatory control in an attempt to prevent the possibility of a future crisis. Auditors are saying that the regulators are defeating their own purpose by overburdening them and…
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All members of the American Board of Forensic Accounting, the advisory board behind the American College of Forensic Examiners Institute’s (ACFEI) Certified Forensic Accountant credential have recently resigned. The unanimous resignation comes amid questions about the legitimacy of the credential and the organization, as a whole. According to accountingtoday.com, the board resigned en masse after learning from a third party that ACFEI founder, Dr. Robert O’Block, had been planning to secretly sell the organization. As a result, former board members have cancelled all future speaking engagements, including an ACFEI conference scheduled for May in Tulsa, OK. For more information, click…