Forensic Accounting BA 124 April 28, 2005

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Forensic Accounting BA 124April 28, 2005

• Forensic Accounting Services
• in a Big Four Firm

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Forensic Accounting in a Big 4 Firm

• Introduction
• Investigative and Dispute Services (IDS)
• Engagement Performance and Approach
• Shenanigans
• Trends
• Questions

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Service Line Structure
Ernst Young LLP
AABS Assurance and Advisory Business Services
Tax
Transaction Advisory
Tax Minimization
Tax Operations
Valuation
Core Assurance
Corporate Finance LLC
Natl Advisory Services
Human Capital
Technology Security Risk Services (TSRS)
Business Risk Services (BRS)
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AABS Structure

• Assurance
• Provides assurance on the state of an
  organization through financial statement audit
  and review of internal controls
• Assesses procedures and controls
• Business Risk Services (BRS)
• Provides comprehensive risk services
• Technology and Security Risk Services (TSRS)
• Helps clients assess and mitigate information
  technology risk
• National Advisory Services (NAS)
• Helps client solve business problems and achieve
  high levels of performance
• 4 National practices

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Investigative and Dispute Services (IDS)

• Practice Areas
• Target Clients
• Success Factors
• Tasks and Skills
• Credentials and Certifications
• Typical Engagement Staffing

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Our Business

• Advising corporate counsel and law firms,
  our more than 750 dedicated Investigative
  Dispute Services professionals apply
  industry-specific knowledge to offer
  comprehensive strategies for preempting,
  managing, and resolving the risks of business
  conflict that can emerge across an organization.

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Key Points of Conflict

• Alternative Dispute Resolution
• Antitrust
• Construction Disputes
• Class Action Matters
• Electronic Evidence Discovery
• Construction Claims
• Expert Witness Services
• Large Business Interruption

• Financial Economic
• Damages Studies
• Franchise Dealership
• White Collar Crime
• Government Investigations
• Product Recall
• Patent and Trademark Disputes
• MA Disputes
• Securities Shareholders Disputes

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IDS Practice Areas

• Investigative Services
• Occupational Fraud
• Financial Statement and Accounting Issues
• Dispute Services
• Damage Analysis
• Intellectual Assets
• Insurance and Business Interruption
• Legal Technology Services
• Computer Forensics
• Data Analysis
• Electronic Evidence

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IDS - Target Clients

• Law firms and their clients
• Corporate general counsel
• Audit committees
• Courts and regulatory agencies

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IDS - Success Factors

• Depth of experience
• Broad based resources
• National practice

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IDS - Tasks and Skills

• Conducting industry and company research
• Analyzing key financial and industry drivers
• Financial modeling
• Analyzing and reviewing litigation documentation

• Creating and maintaining engagement databases
• Drafting client presentations
• Developing and communicating creative solutions

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IDS - Tasks and Skills

• Communication
• Analytical
• Technological / Computer
• Industry Knowledge
• Interpersonal
• Project Management
• Problem-Solving

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IDS Credentials and Certifications

• Examples
• Certified Fraud Examiner
• Certified Public Accountant
• Certified Financial Analyst
• MBA
• JD

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IDS - Typical Engagement Staffing
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Engagement Performance Approach

• Engagement Acceptance
• Regulatory Environment
• Strategy / Scope / Work plan
• Performance of the Investigation
• Testing, Interviews, Analysis / Predictions,
  Electronic Discovery / Computer Forensics
• Documentation
• Quality Assurance/Control
• Final Report/Presentation

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Electronic Evidence/Technology Services

• Electronic Evidence
• Computer Forensics
• Data Analysis

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Shenanigans

• Premature recording of revenue
• Bogus revenue
• One time recurring gains
• Shifting current expenses
• Unrecorded liabilities
• Revenue shifting
• Shifting Future Expenses
• (Note this slide was taken from your course
  notes)

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Trends

• Audit Committee Involvement
• Whistleblower Status
• Internal Controls / Sarbanes sec. 404
• Restatements

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Questions?

• Questions?

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Thank You

• Joseph Rosenbaum
• Ernst Young LLP