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(v) White-Collar Crime and Fraud This is a growing eld within the area of litigation consulting and covers a wide range of cases Examples of fraud and white-collar crime cases are schemes by executives, employees, and customers to siphon funds from nancial institutions for their personal use, check kiting, lapping, computer fraud, embezzlement, defense procurement fraud, costing fraud, schemes involving kickbacks, income tax frauds, charity and religious frauds, money laundering, insider trading cases, and fraudulent bankruptcy actions Additional examples include investigations of boiler room operations that solicit funds from investors based on promises of high investment return and Ponzi arrangements (ie, arrangements in which there are no real pro ts; instead, funds from new investors are used to pay investment returns to existing investors, giving the impression of pro ts) The accountant s work in this area centers on investigating what happened and establishing liability After the investigation is completed, the accountant may be asked to quantify the amount of the loss attributable to the fraud or crime The accountant will typically review and analyze many types of data, including correspondence, e-mail, journal entries, nancial statements, and nancial schedules Many times, the accountant commences his investigation with little to no detail as to the extent of the situation and must put the pieces of a puzzle together This involves developing and testing hypotheses throughout the investigation Therefore, when reviewing documents and other data, it is important to keep an open mind and not dismiss any reasonable possibilities Very often, an investigation in one area will lead to other problem areas Although most litigation takes place in an unfriendly environment, this is especially true in cases involving white-collar crime or fraud The accountant may conduct or assist the attorney in conducting interviews of relevant parties Often, the accountant or attorney is attempting to obtain information from the persons who are the subject of the investigation and are attempting to conceal their activities As such, the accountant should maintain the highest level of professional skepticism throughout the investigation Since the accountant s investigation, work product, and conclusions may form the basis of evidence in the case, it is critical to understand the importance of obtaining and preserving evidence and seek guidance from the retaining attorney about such matters whenever necessary In addition, the accountant may have to coordinate efforts with other areas of law enforcement that may have an interest in the matter The circumstances of each engagement are unique Depending on the circumstances, the accountant or retaining attorney may need to engage other specialists or experts Computer specialists are frequently used in these types of cases to extract data that have been removed from computer drives or to search the contents of computer disks using key word searches Private investigators can also be of great assistance in performing detailed background checks or surveillance of potential suspects The following are speci c examples of tasks that the accountant might perform in different types of white-collar crime cases In white-collar crime cases where Ponzi schemes are suspected, the accountant will want to document how the enterprise was structured and to develop organizational charts and ow charts Tracing transactions from the receipt of investor funds to their ultimate investment or disposition will be required Analyses that illustrate the lack of any positive cash ow other than by raising additional investor funds will be useful to the attorney in proving liability Documenting the ow of all cash transactions or custodial arrangements is all within the accountant s scope The accountant should also analyze cash disbursements to see whether any patterns indicating self-dealing emerge or to identify possible related entities or personal use or bene t of company assets Unusual expenses should be vouched, and particular attention should be devoted to traditionally sensitive areas, such as travel and entertainment expenses Some suspicious transactions are easily detected Many illegal activities involve disguised transactions, but it is just as likely that the paid bills and supporting evidence will be fairly explanatory In the case of a penny stock fraud scheme, the accountant may shift greater attention to the nancial results and reports to shareholders, press releases, and the like to determine if evidence. vb.net ean 13 EAN - 13 Barcode Generator for VB . NET - KeepEdge.com
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