Fraud and the Evolution of Forensic Accounting Education

Forensic accounting, the use of accounting practices in court, developed as a field separate from traditional accounting or auditing throughout the 1900’s. As fraud changed the landscape of auditing practice, forensic accounting slowly began to take shape as the accountant’s answer to fraud. After a series of major frauds at the beginning of the 21st century, forensic accounting became one of the most demanded fields of accounting. The profession, though, was still relatively in its infancy: forensic accountants were predominantly untrained aside from firsthand experience. Since the early 2000’s, schools have begun rapidly implementing forensic accounting programs to meet the increasing demand for forensic accountants. As the demand continues to increase, however, education offerings will be needed

An Investigation on the Effectiveness of Forensic Audit as a Tool for Fraud Detection and Prevention

There has been a rapid increase in the number of fraud and corruption cases despite statutory audits being carried out. This led to the rise in demand for forensic auditing services and in response audit firms began offering this service. The audit firms however suffer from lack of adequate resources, training, knowledge and practical experience. Taking into consideration the impact of these factors this research sought to investigate the effectiveness of forensic audit as a tool for the detection and prevention of fraudulent activities using a Chartered Accountancy Company in Zimbabwe as a case study. The research utilized a mixed approach whereby quantitative data was gathered from closed ended questions quantified using the Likert scale. Qualitative data was gathered from open ended questions and 3 interviews were also conducted. A total of 20 questionnaires were distributed using random sampling, 19 were returned and one lost in the process. To analyze the data the multiple regression method was employed and data was presented using bar graphs and tables supported by explanations. The research revealed that there is a positive relationship between training, level of education and ability to detect and prevent fraud. It was also found that litigation support service has a huge role to play in the effectiveness of forensic auditing in detecting and preventing fraud. Recommendations were made towards increase in training sessions as well as engaging in training and development programs to fully equip auditors with knowledge

The function of remote sensing in support of environmental policy

Limited awareness of environmental remote sensing’s potential ability to support environmental policy development constrains the technology’s utilization. This paper reviews the potential of earth observation from the perspective of environmental policy. A literature review of “remote sensing and policy” revealed that while the number of publications in this field increased almost twice as rapidly as that of remote sensing literature as a whole (15.3 versus 8.8% yr−1), there is apparently little academic interest in the societal contribution of environmental remote sensing. This is because none of the more than 300 peer reviewed papers described actual policy support. This paper describes and discusses the potential, actual support, and limitations of earth observation with respect to supporting the various stages of environmental policy development. Examples are given of the use of remote sensing in problem identification and policy formulation, policy implementation, and policy control and evaluation. While initially, remote sensing contributed primarily to the identification of environmental problems and policy implementation, more recently, interest expanded to applications in policy control and evaluation. The paper concludes that the potential of earth observation to control and evaluate, and thus assess the efficiency and effectiveness of policy, offers the possibility of strengthening governance

Internal audit department characteristics/activities and audit fees: Some evidence from Hong Kong firms

This study provides preliminary support for the notion that internal audit function assists in reducing external audit effort and fees. Data on internal audit characteristics and activities are obtained from survey respondents of Hong Kong companies and audit fee model data are acquired from their annual reports. The results of this study suggest that the external auditor of firms in Hong Kong rely on the internal audit function and subsequently charge a lower fee. Lower external audit fees are associated with a larger internal audit department and certain activities carried out by the internal audit. Specifically, lower external audit fees are associated with more internal audit effort spent on activities relating to financial statements, systems development and maintenance, operating efficiency and effectiveness, fraud investigations and unlimited access to internal auditors’ working papers. The results of this study suggest that the contribution of the internal audit may substitute for some substantive external auditing processes and lower monitoring costs

Office of Anticorruption and Integrity: Annual Report 2013

[Excerpt] Corruption is not single-celled. It does not move in just one direction and has many causes and symptoms. It has no single cure and will continue to grow and fester unless addressed from multiple fronts. The Asian Development Bank’s (ADB) Office of Anticorruption and Integrity (OAI) recognizes that tackling corruption requires a multifaceted approach and a comprehensive network of partnerships and alliances. Tasked to ensure that the finite development funds entrusted to ADB are not misused as a result of fraud and corruption, OAI relies on close collaborations with internal and external partners and stakeholders to fulfill its mandate. OAI’s mandate is underpinned by ADB’s zero tolerance to corruption. It is aligned with ADB’s broader commitment to combat corruption and improve governance as a core strategic objective of ADB Strategy 2020, and the Paris Declaration on Aid Effectiveness of 2005—to which ADB is a signatory—in support of effective, transparent, and accountable aid. More than ever, in 2013 OAI’s anticorruption work focused on prevention, oversight, investigation, and deterrence through partnership, awareness raising, and outreach. Its achievements in 2013 reflect OAI’s close partnership and teamwork with ADB’s governance and operations departments as well as external partners to address fraud, corruption, abuse of resources, and other violations that undermine the integrity and effectiveness of ADB-funded activities

Private Litigation and the Deterrence of Corporate Misconduct

Cox discusses the linkage between private litigation and the deterrence of corporate misconduct

Fraud cycles

Fraud is an ancient crime and one that annually causes hundreds of billions of dollars in losses. We examine the behavioral patterns over time of different types of frauds, which illustrate cyclical frequencies. We develop an evolutionary theory that suggests cyclic behavior in frauds should be common.fraud, cycle, steady state

Semi-Annual Report to Congress for the Period of April 1, 2009 to September 30, 2009

[Excerpt] I am pleased to submit this Semiannual Report to Congress, which highlights the most significant activities and accomplishments of the U.S. Department of Labor, Office of Inspector General (DOL-OIG), for the six-month period ending September 30, 2009. During this reporting period, our investigative work led to 214 indictments, 221 convictions, and $123.1 million in monetary accomplishments. In addition, we issued 22 audit and other reports. OIG audits and investigations continue to assess the effectiveness, efficiency, economy, and integrity of DOL’s programs and operations. We also continue to investigate labor racketeering and/or organized crime influence against unions, employee benefit plans, and workers. From an audit perspective, the OIG is highly engaged in ensuring the integrity of DOL activities related to the American Recovery and Reinvestment Act of 2009 (Recovery Act) funding. During this reporting period, we issued five reports to that end. Among our findings are that DOL implemented procedures for the accounting of Recovery Act financial activity, acted quickly to implement the premium-assistance provisions for workers who temporarily maintain their health insurance at group rates after losing their jobs, and effectively implemented the temporary program for additional unemployment compensation for eligible recipients. We also identified areas for improvement related to financial and performance reporting and programmatic coordination with states. An audit found shortcomings with DOL’s new iCert system, which is designed to identify inaccuracies in H-1B labor condition applications (LCAs) for foreign workers. We found that, because of missing electronic checks, manual reviews of the LCAs by analysts are necessary. However, increases in the volume of applications may result in analysts not being able to perform a 100 percent review. This increases the risk of LCAs being improperly certified. Our audits also continue to reveal that some Job Corps centers do not comply with requirements for reporting performance for student attendance and accountability. We also found that, at three centers, a contractor had not ensured compliance with procedures to address student misconduct. An audit of the handling of injured Federal employees’ reemployment status at two Federal workers’ compensation district offices found that the Department did not ensure that consistent intervention actions were taken toward removing cases from the periodic roll. This increased the risk of claimants continuing to receive full Federal Employee’s Compensation Act benefits after they were able to return to work or after their compensation could have been reduced. Our investigations continue to combat organized crime and/or labor racketeering involving the monies in union- sponsored benefit plans, internal union corruption, and labor-management relations. A major OIG investigation disclosed more than 30 years of organized crime control of the International Longshoremen’s Association Local 1235, which represents port workers in New Jersey. In another investigation, the business manager for the Electrical Workers Local Union No. 3, who was a former New York State assemblyman, was sentenced to 10 years’ imprisonment on racketeering, bank fraud, and false statement charges involving a number of schemes carried out for personal gain. OIG investigations also identified vulnerabilities and fraud in DOL programs, such as the foreign labor certification (FLC) program. One OIG investigation led to the recent sentencing of Viktar Krus and his co-conspirators to various periods of incarceration for fraudulently obtaining visas for more than 3,800 foreign nationals and defrauding the government of$7.4 million in payroll taxes. Because of our investigative expertise, the OIG is a member of the International Organized Crime (IOC) strategy headed by the U.S. Attorney General. The IOC is committed to combating crime by international organized groups. Finally, I would like to express my sincere gratitude to former DOL Inspector General Gordon S. Heddell, who is now serving as the Inspector General at the U.S. Department of Defense. During his leadership of more than eight years, the DOL-OIG consistently achieved significant results similar to those presented in this report. As Acting Inspector General, I look forward to continuing to work with the Secretary of Labor and her management team in ensuring the effectiveness of DOL in delivering services and protecting the rights and benefits of American workers and retirees