Materi 8 Akuntansi Forensik1

Fraud InvestigationFraud Examination

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Early Fraud DetectionThree Primary Ways to Detect Fraud

By chance

By providing whistle-blowing systems

By data mining

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Accounting 537The CFE gathers evidence ofthe ELEMENTS of FraudElementsOf Fraud

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Early Fraud DetectionMining Company Databases

Mining databases for suspicious trends, numbers, and other anomalies.Whistle-blowing Systems

A reporting hotline or online system that allows others to call in or submit an anonymous tip of a fraud suspicion

Examples:Internal systems/hotlinesThe Association of Certified Fraud ExaminersAllegience

Accounting 537When would we actually begin a Fraud Examination?Circumstances, Taken as a Whole, that Leads a Reasonable Prudent Professional to Believe a Fraud is Occurring, or Has Occurred, or Will OccurWhen there is PREDICATION of fraud

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Accounting 537What Are the Considerations in Deciding to Investigate?Perceived strength of the predicationPerceived cost of the investigationExposure or amount that could have been takenSignal that investigating or not investigating will send to others in the organizationRisks of investigating or not investigatingPublic exposure or loss of reputation from investigating or not investigatingNature of the possible fraud

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Interview Suspect

Accounting 537The CFEs Evidence SquareTestimonial EvidencePersonal ObservationPhysical EvidenceDocumentary Evidence

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Accounting 537The CFEs Evidence SquareTestimonialPersonal ObservationPhysicalDocumentaryGathered from Individuals, Includes Interviewing, Interrogation & Honesty TestsCollected by the Investigator, includes Invigilation, Surveillance and Covert Operations

Fingerprints, Weapons, Stolen Property Often Involves Forensic Analysis

Gathered from Papers, Computers & Written & Printed Sources

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Fraud InvestigationTestimonial Evidence

Evidence gathered from individuals

Techniques:Interviewing

Interrogation

Honesty tests

Fraud InvestigationDocumentary EvidenceGathered from paper, computers, and other written or printed sourcesTechniques:Document examinationData miningPublic records searchesAuditsComputer searchesNet worth calculationsFinancial statement analysisCorporate databases E-mail servers

Fraud InvestigationPhysical EvidenceFingerprintsTire marksWeaponsStolen propertyIdentification numbersMarks on stolen objectsOther tangible evidenceTechniques:Forensic analysis by experts

Fraud InvestigationPersonal Observation

Evidence that is sensed (seen, heard, felt, etc.) by the investigators

Techniques:Invigilation

Surveillance

Covert operations

Accounting 537Evidence GatheringSurveillance & Undercover OperationsInvigilationPhysical Evidence Documents paper and electronicChain of custody rulesAccess subpoena, search warrant, voluntaryForgery or alteration

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Accounting 537Sources of InformationPublic RecordsInternetSearches Google Altavista Etc.

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Income Reconstruction MethodsDirect MethodCalculating income from information obtained in books and records, usually looking for unreported incomeExamples: non reported sales or transfers of real estate, cars, or insured items, and non reported transactions represented by invoices

Indirect MethodThis is to be used when the books are not adequate, or unavailable.

Indirect Methods of Reconstructing Income

Net Worth MethodSources and Applications of FundsPercentage Markup MethodBank Deposit MethodUnit Volume Computation

Accounting 537Net Worth Calculation Assets Liabilities = Net Worth Net Worth Prior Years Net Worth = Net Worth Increase Net Worth Increase + Living Expenses = Income Income Funds from Known Sources = Funds from Unknown Sources

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Accounting 537How can information be obtained from a sourcePencil & Paper TestGraphologyVoice Stress Analysis & Polygraphs

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Accounting 537InterviewingMost Common TechniqueQuestion & Answer FormatStructured Has a PurposeLow CostEffective if Done Well

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Fraud InvestigationFraud Examination

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Fraud InvestigationThe Fraud Element Triangle: Theft Act

Catch perpetrators in the embezzlement act or to gather information about the actual theft acts

The Fraud Element Triangle: Concealment

Focus on records, documents, computer programs and servers, and other places where perpetrators conceal or hide their dishonest acts

Fraud InvestigationThe Fraud Element Triangle: Conversion

Search for ways the perpetrators spent or used their stolen assets.

Conducting a Fraud InvestigationUndertaken only to establish the truth

Experienced and objective investigators

Confidentiality

Need to know

Evidence independently corroborated

No questionable investigative techniques

Fair and objective communication

Accounting 537Interviews ObtainInformation that Establishes Essential Elements of the CrimeLeads for Developing the Case or Gathering Other EvidenceCooperation of Witnesses & VictimsInformation on Personal Background & Motives of Witnesses

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Accounting 537What information do you need to plan the interview?About The OffenseLegal NatureDate, Time, PlaceManner in which Crime was CommittedPossible MotivesAll Available EvidenceAbout The IntervieweePersonal BackgroundAgeEducationMarital StatusAttitude Toward Investigation

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Accounting 537Interviewers DemeanorSit Fairly Close, Stay SeatedDont Talk DownBe Sensitive & Business LikeDo Not Dominate InterviewDo Not Use JargonDo Not Use Paper & Pencil, Keep Out of SightExpress Sincere Appreciation

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Accounting 537Interview LanguageShort Questions, Stay on One TopicSeek Narrative AnswersNo Leading QuestionsGet the Facts for OpinionsKeep Interviewees on TrackStay on TopicConcentrate on Answers

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Accounting 537List 5 Types of QuestionsIntroductoryInformationClosingAssessmentAdmission Seeking

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Accounting 537What is the reaction sequence?Denial Acts as a psychological buffer, subject doesnt acknowledge stressAnger All directions, result of frustrationRationalization or Bargaining Justify dishonest actions, A mistake was made.Depression Sad and withdrawnAcceptance Realistic understanding of what happened, resolve & move on, best time for interviews

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Accounting 537Why is the reaction sequence important to a fraud examiner?The suspect may go through this sequence in the course of an interview. Other people in the organization may go through this sequence in the course of the investigation.Being aware of these emotional stages will help the fraud examiner to identify them and take the more productive actions.

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End Fraud InvestigationFraud Examination

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Accounting 537Discuss Pencil & Paper TestsHonestyCodes of Ethics50% to 90% AccurateEasy to TabulateCode of Ethics

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Accounting 537GraphologyThe study of handwriting for the purpose of character analysis.Increased UtilizationBanking, Manufacturing & InsuranceFraud Examiners Skeptical

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Accounting 537Voice Stress Analysis & PolygraphsUsed to Determine If Someone Is Telling the Truth Or LyingPulse, Blood Pressure, Respiration, etc.Frightens Innocent PeopleNot Effective for Psychopathic LiarsVoluntaryAdministration Affects the Quality of Results Accepted

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