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FINANCIAL INVESTIGATION AND FORENSIC ACCOUNTING
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Forensic accounting can be defined as the science of gathering and presenting financial
information in a form that will be accepted by a court of jurisprudence against perpetrators
of economic crimes.
Economic crimes have increased dramatically in recent years. This becomes evident
in viewing newspaper reports, which on an almost daily basis report of economic crimes
committed in communities across the country. One can read of a person embezzling funds
from a bank or company, a political person accepting kickbacks for political favors, a con
artist who swindles people out of money by fraudulent schemes, or a person selling illegal
products (drugs, alcohol, or tobacco).
Law enforcement personnel in recent years have become more aware of white-collar
crimes. However, they have lacked the training and expertise in combating such crimes.
This is particularly true for small police departments. The law enforcement community
today is better trained at combating violent or personal behavior crimes, but now it has
the responsibility to expand its knowledge and expertise into the economic crimes area.
In order to do this, law enforcement must receive further education and training. Many
police departments, both small and large, focus their resources on violent crimes. Since
many detectives do not have an accounting background, they often fail to use financial
information to support their cases. This is particularly true in organized crime and drug
trafficking cases. Congress and some states have enacted laws for law enforcement to use
financial information to support their cases. Some large police departments have employed
accountants to help law enforcement develop financial information, but they are relatively
few. One South Florida police department with over 2000 sworn officers has only one
accountant, and he is swamped with cases. Some police departments will contract an
accountant for a case, but this is rare.
The accounting profession is beginning to change from examination for irregularities
to examination for fraud on the part of employees and management. Some of the largest
bankruptcies have occurred during the last 5 years because management has been “cooking
the books” to hide their skimming of huge amounts of funds from public corporations.
This has resulted in many investors losing their life savings or retirement nest eggs. This,
of course, has resulted in a change of audit procedures to encompass external third-party
inquiries as well as internal audit procedures. Financial institutions and credit reporting
agencies are becoming more involved with business organizations’ financial affairs by
requiring more disclosures. They are developing more techniques to uncover potential
fraudulent schemes by developing profiles, which will identify perpetrators before huge
losses are incurred by other businesses.
George A. Manning, Ph.D., C.F.E., E.A. - Personal Name
ISBN 0-8493-2223-5
NONE
Accounting
English
CRC Press.
2005
USA
1-570
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