Cover image for Forensic accounting and fraud investigation for non-experts
Forensic accounting and fraud investigation for non-experts
Silverstone, Howard.
Personal Author:
3rd ed.
Publication Information:
Hoboken, N.J. : Wiley, [2012]

Physical Description:
xvi, 320 pages : illustrations ; 24 cm
Forensic Accounting andFraud Investigation for NON-EXPERTSThird Edition The essential guide for every business professional, Forensic Accounting and Fraud Investigation for Non-Experts, Third Edition is a must-have resource if you've been wondering how financial fraud occurs in an organization and what to do if you find or suspect it. With comprehensive coverage, the authors present useful advice on where your organization is most susceptible to fraud. Forensic Accounting and Fraud Investigation for Non-Experts, Third Edition features: Coverage of the core accounting, investigative, and legal aspects of forensic accounting for professionals new to the field New cases and new material on technology tools in forensic accounting A look at the investigative and legal process along with interview techniques Highly readable and accessible, this timely book provides you with a complete grounding in all phases of forensic accounting and fraud investigation, with methods and tips that will enable you to readily recognize and investigate financial fraud, as well as the evolving sophistication of financial crimes occurring in every sector of industry. Executives, managers, criminal investigators, and prosecuting attorneys all require a basic understanding of accounting principles and investigative techniques to protect their organizations from fraud. Forensic Accounting and Fraud Investigation for Non-Experts, Third Edition helps non-accountants better understand basic forensic accounting principles, how different types of fraud occur, and how to detect and probe fraud in an approach that maximizes the chances of successful prosecution of the perpetrator.
pt. I. Fraud and forensic accounting overview -- Ch. 1. Forensic accounting -- What is forensic accounting? -- Why has forensic accounting become the buzz? -- Introduction to a profession -- Applications for forensic accounting -- A third dimension: contexts within each area of specialization -- Conclusion -- Suggested readings -- Notes. ; Ch. 2. Fraud in society -- What is fraud? -- Types of fraud -- Other types of financial fraud -- Sarbanes-Oxley -- What the numbers tell us about fraud -- Categories of occupational fraud -- Drawing conclusions -- Societies perception of fraud -- Who commits fraud? Profile of the typical fraudster --The social consequences of economic crime -- Conclusion -- Suggested readings -- Notes. ; Ch. 3. Understanding the basics of financial accounting -- Where it all begins -- The five accounting cycles -- Journals: subsidiary and general -- Conclusion -- Suggested readings -- Note. ; Ch. 4. Forms of entities -- Basics of business structures -- Sole Proprietorships -- Partnerships -- Corporations -- Business enterprises in the global environment -- Conclusion -- Suggested readings -- Notes. ; Ch. 5. Fundamental principles of financial analysis -- Good analysis = due diligence? -- Why perform financial analysis?-- What and whom can you trust? -- Other factors to consider -- Financial analysis for the non-expert -- To the future -- Conclusion -- Suggested readings -- Notes. ; Ch. 6. The role of the accounting professional -- The importance of accounting professionals in the investigation -- The audit process -- Internal controls -- Conclusion -- Notes.

pt. II. Financial crime investigation -- ch. 7. Business as a victim -- Introduction -- Employee thefts -- Fraudulent billing schemes -- Fraud committed by outsiders -- Management thefts -- Corporate thefts -- Identity theft -- Conclusion -- Suggested readings -- Notes. ; Ch. 8. Business villains -- Introduction -- Organized crime and business -- Money laundering -- Conclusion -- Suggested readings-- Notes. ; Ch. 9. The investigative process -- Introduction -- Case initiation -- Case evaluation -- Solvability factors -- Goal setting and planning -- Investigation -- Background -- Conclusion -- Suggested readings -- Notes. ; Ch. 10. Interviewing financially sophisticated witnesses -- Introduction -- The interview -- Interviewing financially sophisticated witnesses -- Conclusion -- Suggested readings -- Notes. ; Ch. 11. Proving cases through documentary evidence -- Introduction -- Document collection -- Document organization -- The process of proof -- The logic of argument -- Proof through inference -- Conclusion -- Suggested readings -- Notes. ; Ch. 12. Analysis tools for investigators -- Introduction -- Why use analysis tools at all? -- Associational analysis -- Temporal analysis -- Conclusion -- Suggested readings -- Notes. ; Ch. 13. Inferential analysis -- Introduction -- How inferential analysis helps -- What is an inference network? -- Investigative inference analysis -- The key list -- Constructing an investigative inference chart -- Plotting the chart -- Some tips for charting success -- Applying the chart to the investigative process -- Conclusion -- Suggested readings -- Notes. ; Ch. 14. Documenting and presenting the case -- Introduction -- Creating a system -- The casebook system -- Report writing -- Testifying as a financial expert -- Conclusion -- Suggested readings -- Notes.
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Fully revised, the proven primer on forensic accounting withall-new cases

A must-have reference for every business professional, Forensic Accounting and Fraud Investigation for Non-Experts,Third Edition is a necessary tool for those interested inunderstanding how financial fraud occurs and what to do when youfind or suspect it within your organization. With comprehensivecoverage, it provides insightful advice on where an organization ismost susceptible to fraud.

Updated with new cases and new material on technology tools inforensic accounting Covers the core accounting, investigative, and legal aspects offorensic accounting for professionals new to the field Covers investigative and legal issues along with accountingschemes

Written by a team of recognized experts in the field of forensicaccounting, Forensic Accounting and Fraud Investigation forNon-Experts, Third Edition is essential reading for accountantsand investigators requiring the most up-to-date methods in dealingwith financial fraud within their organizations.

Author Notes

Howard Silverstone, CPA, FCA, CFE , is Director at Forensic Resolutions, Inc.

Michael Sheetz, JD , is an adjunct professor of business law, ethics, and international law for several universities, and a former appellate law clerk for the Fourth District Court of Appeals.?

Stephen Pedneault, CPA/CFF, CFE, is a Principal of Forensic Accounting Services, LLC, where he specializes in forensic accounting, employee fraud, and litigation support matters. He is an adjunct professor at the University of Connecticut; is the author of Fraud 101: Techniques and Strategies for Understanding Fraud, Third Edition; contributed to Fraud Casebook: Lessons from the Bad Side of Business; and has written articles for state and national publications.

Frank E. Rudewicz has more than thirty years' experience conducting domestic and international investigations for fraud, ethics, and other employment-related conduct. Mr. Rudewicz has been involved in numerous high-profile and sensitive engagements regarding fraud, organized crime, compliance, and security assessments. He has appeared on Dateline NBC, Forensic Files, and various other media outlets for his investigative work. A recognized expert on security and investigations, Mr. Rudewicz lectures and teaches frequently on these topics. He often provides expert testimony and conducts independent inquiries for a variety of employee misconduct issues.

Reviews 1

Choice Review

For business persons, students, and faculty interested in forensic accounting and fraud investigation, this volume deserves a spot on the bookshelf. The first part of this new edition (2nd ed., CH, Jun'07, 44-5747) provides an overview of fraud types and a brief history of "fraudsters." Financial accounting, including financial analysis, is covered without the use of journal entries or ledger accounts that would bog down the nonexpert reader. The case studies integrated throughout the book's first part are numerous and fascinating. The second part of the work presents a detailed, sequential view of the investigative process. Starting with an overview of the preliminary planning of an investigation, the authors, all forensic accounting experts, proceed to cover interviewing techniques; evidence documentation; and use of association analysis, temporal analysis, key lists, and inference charts to organize and better understand large volumes of information. They then discuss the final report and presentation of case findings to a judge and jury not schooled on the technical issues involved. The suggested readings and end-of-chapter notes provide a wealth of sources for readers interested in furthering their understanding. Summing Up: Highly recommended. Upper-division undergraduate students through practitioners. R. Derstine Kutztown University of Pennsylvania

Table of Contents

Prefacep. xiii
Acknowledgmentsp. xv
Part I Forensic Accounting and Fraud Overviewp. 1
Chapter 1 Forensic Accountingp. 3
What Is Forensic Accounting?p. 3
Why Has Forensic Accounting Become the Buzz?p. 4
Introduction to a Professionp. 5
Applications for Forensic Accountingp. 6
A Third Dimension: Contexts within Each Area of Specializationp. 11
Conclusionp. 14
Suggested Readingsp. 15
Notesp. 15
Chapter 2 Fraud in Societyp. 17
What Is Fraud?p. 17
Types of Fraudp. 21
Other Types of Financial Fraudp. 25
Sarbanes-Oxleyp. 27
What the Numbers Tell Us about Fraudp. 28
Categories of Occupational Fraudp. 29
Drawing Conclusionsp. 31
Society's Perception of Fraudp. 32
Who Commits Fraud?-Profile of the Typical Fraudsterp. 33
The Social Consequences of Economic Crimep. 39
Conclusionp. 39
Suggested Readingsp. 40
Notesp. 40
Chapter 3 Understanding the Basics of Financial Accountingp. 43
Where It All Beginsp. 43
The Five Accounting Cyclesp. 46
Journals: Subsidiary and Generalp. 54
Conclusionp. 56
Suggested Readingsp. 56
Notep. 57
Chapter 4 Forms of Entitiesp. 59
Basics of Business Structuresp. 59
Sole Proprietorshipsp. 60
Partnershipsp. 60
Corporationsp. 63
Business Enterprises in the Global Environmentp. 66
Conclusionp. 70
Suggested Readingsp. 70
Notesp. 72
Chapter 5 Fundamental Principles of Financial Analysisp. 73
Good Analysis = Due Diligence?p. 73
Why Perform Financial Analysis?p. 76
What and Whom Can You Trust?p. 76
Other Factors to Considerp. 77
Financial Analysis for the Non-Expertp. 78
To the Futurep. 85
Conclusionp. 86
Suggested Readingsp. 87
Notesp. 87
Chapter 6 The Role of the Accounting Professionalp. 89
The Importance of Accounting Professionals in the Investigationp. 89
The Audit Processp. 93
Internal Controlsp. 98
Conclusionp. 101
Notesp. 101
Part II Financial Crime Investigationp. 103
Chapter 7 Business as a Victimp. 105
Introductionp. 105
Employee Theftsp. 106
Fraudulent Billing Schemesp. 112
Fraud Committed by Outsidersp. 113
Management Theftsp. 114
Corporate Theftsp. 117
Identity Theftp. 118
Conclusionp. 120
Suggested Readingsp. 120
Notesp. 120
Chapter 8 Business Villainsp. 123
Introductionp. 123
Organized Crime and Businessp. 123
Money Launderingp. 130
Conclusionp. 137
Suggested Readingsp. 138
Notesp. 139
Chapter 9 The Investigative Processp. 143
Introductionp. 143
Case Initiationp. 144
Case Evaluationp. 145
Solvability Factorsp. 147
Goal Setting and Planningp. 148
Investigationp. 156
Backgroundp. 158
Conclusionp. 166
Suggested Readingsp. 167
Notesp. 167
Chapter 10 Interviewing Financially Sophisticated Witnessesp. 169
Introductionp. 169
The Interviewp. 170
Interviewing Financially Sophisticated Witnessesp. 185
Conclusionp. 188
Suggested Readingsp. 189
Notesp. 190
Chapter 11 Proving Cases through Documentary Evidencep. 193
Introductionp. 193
Document Collectionp. 194
Document Organizationp. 207
The Process of Proofp. 211
The Logic of Argumentp. 213
Proof through Inferencep. 217
Conclusionp. 221
Suggested Readingsp. 222
Notesp. 224
Chapter 12 Analysis Tools for Investigatorsp. 227
Introductionp. 227
Why Use Analysis Tools at All?p. 227
Associational Analysisp. 229
Temporal Analysisp. 246
Conclusionp. 252
Suggested Readingsp. 252
Notesp. 253
Chapter 13 Inferential Analysisp. 255
Introductionp. 255
How Inferential Analysis Helpsp. 255
What Is an Inference Network?p. 256
Investigative Inference Analysisp. 259
The Key Listp. 263
Constructing an Investigative Inference Chartp. 264
Plotting the Chartp. 268
Some Tips for Charting Successp. 272
Applying the Chart to the Investigative Processp. 273
Conclusionp. 275
Suggested Readingsp. 275
Notesp. 277
Chapter 14 Documenting and Presenting the Casep. 279
Introductionp. 279
Creating a Systemp. 279
The Casebook Systemp. 280
Report Writingp. 287
Testifying as a Financial Expertp. 290
Conclusionp. 305
Suggested Readingsp. 305
Notesp. 306
About the Authorsp. 309
Indexp. 311