Madoff’s Auditor Charged With Securities Fraud

Lawrence R. Beebe, CPA, Principal

David G. Friehling and his firm,Friehling& Horowitz, CPAs, P.C., have been charged with securities fraud by the Securities and Exchange Commission in connection with audits of the financial statements of Bernard L. Madoff Investment Securities LLC.  The SEC charges that from 1991 through 2008, Friehling& Horowitz issued audit reports on the financial statements of Madoff’s company, indicating that the statements were fairly presented in accordance with generally accepted accounting principles, when in reality no legitimate […]

March 23, 2009 Accounting, Audit, Forensic Accounting Read more...

Starting a New or Saving Your Current Family-Owned Business in this Economy

Posting by Geoffrey D. Brown, CPA, Principal

Considering starting a new family-owned business, even in this economy?  Or perhaps you want your current family business to survive, or even thrive.  It seems counter-intuitive to think of starting up or growing in a recession, but there are some ways to approach these goals.

As we have seen often with our family business clients, many family-owned firms put off formalizing in writing an actual business plan, business strategy, succession plan, etc.  Although it […]

March 20, 2009 Family Owned Businesses Read more...

Payroll Audits vs. 100% Assurance

Posting by Kurt Needles, CPA

After teaching my session on payroll auditing at the IFEBP conference, I had the opportunity to continue my discussion with the staff of a mid-central administrative office. Not only did they disagree with some of my comments, they thought I was completely wrong. The issue boiled down to “what is the function of the audit”. Is it to give the plan reasonable assurance that the contributions are being remitted correctly, or is it to give […]

March 19, 2009 Benefit Plan Accounting, Payroll Audit Read more...

SEC Alleges Multi-million Dollar Fraud in Virginia

Lawrence R. Beebe, CPA, Principal

While Bernard Madoff dominates the financial news with his conviction for cheating investors out of billions of dollars by operating a Ponzi scheme, the SEC continues to investigate lesser known advisors who may have mirrored Madoff on a smaller scale.  The SEC recently filed charges against John M. Donnelly of Charlottsville, Virginia, accusing him of running a Ponzi scheme that defrauded as many as 31 investors out of $11 million.  The SEC alleges that Donnelly […]

March 16, 2009 Accounting, Audit, Forensic Accounting Read more...

Former SEC Chief Accountant Credits Auditors

John Merchant, CPA, CFE

CFO.com reports that Lynn Turner, former chief accountant of the Securities and Exchange Commission, credited financial statement auditors for contributing to the general decline in major financial statement frauds since the collapse of Enron and WorldCom.  Turner noted that auditors have stood behind fair value and tried to “get the numbers right”.  At the same time he criticized the Financial Accounting Standards Board for doing an abysmal job in standards setting, particularly with regard to rules […]

March 16, 2009 Accounting, Audit, Forensic Accounting Read more...

Family Business Financing Methods and Favorable Capital Gains Rates

Posting by Joel C. Susco, CPA

It has been a very busy few years.  Our firm has had the opportunity to participate in a number of interesting transactions involving the transfer of an ownership interest in a variety of entities.  The need and desire to maintain the viability of an entity and continual existence is on the forefront of every owner’s mind.  It is critical that a well-structured and properly-executed agreement be drafted.  In some instances, the need for adequate […]

March 13, 2009 Family Owned Businesses, Tax Read more...

Family Business Planning Begins at an Early Age

Posting by Jacqueline M. Thompson, CPA

There was an interesting article dealing with the education of family members in a family owned business in the August 2008 issue of Trusts & Estates (“Fostering Independence”). In it, a manager of a family office and a family business consultant discuss how a particular family business has structured their educational program. As a financial family, they have broken their family members into five groups: 10 Children under the age of 16; 2) Family […]

March 6, 2009 Family Owned Businesses Read more...

FINRA Provides Online Anti-Fraud Tools

John Merchant, CPA

The Financial Industry Regulatory Authority (FINRA), the largest independent regulator for securities firms doing business in the United States, is providing two new online tools for investors.  The Scam Meter helps investors determine whether a potential investment may be too good to be true.  The Risk Meter helps investors determine whether they share behavioral traits with people who have been found susceptible to fraud.  FINRA has also issued an alert called Avoiding Investment Schemes to provide information […]

March 2, 2009 Accounting, Forensic Accounting Read more...

Why are Certain Frauds Called Ponzi Schemes?

John Merchant, CPA, CFE

As you read about unscrupulous people defrauding investors through pyramid schemes, have you ever wondered why they are called Ponzi schemes?  The answer is that over 80 years ago a man named Charles Ponzi created a multi-million dollar pyramid scheme that became so famous that it has forever linked his name to this type of fraud.  CNN has created an interesting article (follow the link below) that gives readers a look into the life of the man […]

February 16, 2009 Accounting, Audit, Forensic Accounting Read more...

FBI Warns of Jury Service Fraud Scheme

John Merchant, CPA, CFE

The Federal Bureau of Investigation warns that criminals are conducting a unique telephone scam by posing as employees of the U.S. court system.  They contact individuals by telephone and inform them that they have been selected for jury duty in a U.S. court.  They then ask the person to verify their name and social security number and later proceed to ask for credit card information.  If skeptical individuals decline to provide information, the caller threatens them […]

February 16, 2009 Accounting, Forensic Accounting Read more...