Recreating the Crime through the Numbers: A Guide to Fraud Investigation, Part 2

Alex Helfand, ENCE, Computer Forensic Specialist

In my previous post , I detailed the initial stages of a fraud investigation.   This post reviews the final stages of an investigation and how a conclusion is reached. 

Creating the Hypothesis and Collecting the Data
Once the interviewing process has concluded, I will brainstorm possible ways the fraud could have occurred and then formulates a hypothesis of how I believe the fraud occurred. This is the point in which I begin to collect “hard” evidence […]

Recreating the Crime through the Numbers: A Guide to Fraud Investigation, Part 1

Alex Helfand, ENCE, Computer Forensic Specialist

Recreating fraudulent employee activity can be difficult, but with a well-organized approach, a Certified Fraud Examiner (CFE) may be able to determine how, and to what extent, fraud has occurred. In this two-part blog post, I will discuss the basic procedures employed in fraud investigation and provide some real-world examples of their applications.  While the procedures are fairly universal, it is important to note that no two frauds are alike, and these procedures may […]

Smoke and Mirrors: Fraud and the Closed Bank Account

John Merchant, CPA, CFE

Senior management of businesses, non-profit organizations and employee benefit plans often find that their organizations are maintaining bank accounts that are no longer needed.  Consequently, they instruct someone within the organization – often the chief financial officer, the controller, or a bookkeeper – to close the account.  The person charged with closing the account will normally provide a bank statement showing that the account balance has been reduced to zero as evidence of completion of the […]

Detecting Financial Statement Fraud: Part 2

Alex Helfand, ENCE, Computer Forensic Specialist

In the previous post , I reviewed common motivations for committing financial statement fraud, as well as several common ways that financial statements can be manipulated.  This post covers additional misrepresentations and how forensic accountants identify them.
Concealed Liabilities and Expenses: Concealed liabilities can include warranties attached to sales, underreported Incurred-but-not-Reported (IBNR) health benefits, or simple omission of liabilities.  Expenses can be concealed by capitalization that spreads the expense out over a number of years […]