Learn How to Investigate Fraud

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If you want to learn how to do fraud investigations from a forensic accountant what has over 20 years of experience in the field… here’s your chance!

This course is for:

  • Accountants who want to begin doing financial investigations
  • Investigators who need training on the financial aspects of investigations
  • Students considering a career in forensic accounting

The course is divided into 4 classes that are each 2 hours long. You can take all of them or some of them. You can take them in any order. In other words, none of the classes is dependent on the others. Each could easily be taken alone.

This fraud investigation course is being offered by CPA Crossings. The classes are online, generally offered one  per week, so you could take all four courses with a calendar month. These are not your usual boring PowerPoint with voiceovers. You get actual videos of me teaching with PowerPoints used to supplement and highlight the material.

Here is a summary of the four sessions, along with my affiliate link to register for the class. (Please use my link so I can get credit for referring you to CPA Crossings and we can track the success of my postings.) In future posts, I’ll go into greater detail about each of the courses. The series kicks off on September 3, 2020.

Becoming a Fraud Investigator  
Prepare to perform a fraud investigation.
Starting a Fraud Investigation  
Early stages of a fraud investigation.
How To Guide to Fraud Investigations  
Learn how to do an asset misappropriation investigation.

Reporting the Results of a Fraud Investigation  
Write a report on your findings and testify in court.

What to Do When You Are Being Audited and Your Records are a Mess

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How to terrify just about anyone: Tell them their taxes are being audited.

Even worse: When their books and records are a mess. (Or maybe even non-existent.)

Every number could be scrutinized. That means documentation must be produced to support the amount of each expense and the business purpose of the item.

Some of us are meticulous in our documentation, but if you are like most taxpayers, you have pockets of misplaced or destroyed data. Even worse, you may be in a situation where documentation was completely destroyed by a fire or flood. If you don’t have documentation, does that mean your deductions are automatically disallowed? Not necessarily. Continue reading

Using AI in Accounting? The ScaleFactor Scam

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Artificial Intelligence (AI) is everywhere. And companies that fine new or better ways to use AI create advantages for themselves, largely because it may give them the ability to scale things a reduced cost, and also because it may attract new clients who want this technology advantage.

In accounting, AI is most typically used to automate bookkeeping functions: recognizing payees and automatically categorizing transactions, matching transactions (ex. matching a purchase order to an  invoice), automatically producing certain financial reports, basic financial analysis. (AI isn’t yet good at complex financial analysis, but the ability to interpret data will continue to develop.)

Overall AI decreases the need for manual tasks such as inputting data and routine analysis of financial statements. That frees up accountants to do more specialized tasks. Think of it as automating the administrative tasks so the accountants can do the creative tasks.

I also use AI in my forensic accounting practice, although you might not recognize it as that. When I use software to perform data analytics (which has been around for a long time), I’m using AI. The data analytics are often centered around analyzing large sets of data to identify anomalies or patterns that are concerning. But we can also use AI to help link sets of data (think of matching transfers between accounts or matching bank transactions to underlying accounting system data). Continue reading

Monat Income Disclosure Statements

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Monat was started in 2014 as a subsidiary of Alcora Corp. The company has offers both skincare and haircare products, but has become known for its miracle shampoo and related products.

Unfortunately, Monat has been plagued by claims that the hair products cause hair loss and severe scalp irritation.

The distributors are called “Market Partners” and the company lists the following “perks” when you sign up:

  • Eligible for Independent Market Partner promotions and incentives
  • Your own replicated website/e-commerce store for easy ordering
  • 30% commission on retail sales, 15% commission on VIP Customer sales
  • Access to our physical and web-based materials to inform you, your team and your customers
  • No inventory requirements; MONAT ships directly
  • Freedom to explore sales territories locally and nationally
  • Prizes and fabulous incentive trips in recognition of reaching your goals
  • Access to Product Packs within your first 30 days of enrolling

Here are the income disclosure statements we have collected for Monat:

Calculating a Business Interruption Claim

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Tracy walks through the process of calculating a business interruption insurance claim, also called a business income loss. When a company is unable to operate for a period of time due to a covered loss (a fire, for example), its insurance policy may provide coverage that pays for lost profits while the business is closed. Tracy explains how to calculate net income plus continuing expenses in cases such as this.

For Aspiring Fraud Investigators and Forensic Accountants

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forensic-accountingI receive many requests for information on the field of forensic accounting, including questions on courses of study, certification, job opportunities, and preparing for a career.  Here are a few quick tips:

  • Establish a background in general business and finance/accounting. You need a good working knowledge of financial statements and the accounting process. The real world is different than textbooks.
  • Find opportunities to work on things that involve fraud. If you work at an auditing firm, make sure the partners know you’re interested in participating in fraud investigation. If you work at a corporation, get in touch with whoever handles investigations. Get any experience you can.
  • After you have a strong foundation, look for job opportunities that advance you toward your ideal fraud investigation position. If you’re in accounting, don’t take a dead-end accounting job that gets you no closer to fraud investigations. Look for the job that has the potential to move you into fraud investigations.

The most important thing is to start getting experience. Any experience.

Continue reading

Analyzing Historical Earnings for Child Support and Spousal Support

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Spousal support and child support are most heavily influenced by the earnings of the parties. Historical earnings will play a big part in these calculations, so it is important to properly analyze them.

Income can easily be determined in cases in which the party or parties only receive traditional wages. The rate of pay is constant, and it is easy to confirm historical earnings. The forensic accountant must be careful to account for things like raises, overtime earnings, or periods during which a party does not work. However, as a general rule, past earnings can be easily analyzed and future earnings are fairly predictable. Continue reading

A Bankruptcy Investigation Example

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The skills of a forensic accountant can be useful in bankruptcy cases. In this video, Tracy talks about a case in which she was retained by a creditor to examine the finances of the debtor. There were allegations that the debtor concealed material facts about its financial position when it originally applied for credit, and that certain disclosures in the bankruptcy filing were fraudulent.