Data Sleuth: Using Data in Forensic Accounting Engagements and Fraud Investigations

Cover
Title Page
Copyright Page
Contents
Foreword
Preface
Acknowledgments
Chapter 1 Building a Data Sleuth Team
	The First Team
	The Forensic Accountant
	Technical and Strategic
	Thorough and Efficient
	Detail-Oriented and Effective Communication
	Accounting Knowledge and Legal Knowledge
	Meeting Deadlines and Developing Business
	Forensic Accountant Problems
	The Scalability Problem
	The Strategy Problem
	The Review Problem
	The Sustainability Problem
	Data Sleuth Solutions
	The Scalability Solution
	The Strategy Solution
	The Review Solution
	The Sustainability Solution
	Notes
Chapter 2 The Data Sleuth Process
	Engagement Types
		The Case of the Reimbursing Controller
		Data-Driven Results
	Simultaneously Managing Client Expectations and Objectivity
		The Case of the Mistaken Divorcee
		Don’t Be a Hired Gun
		There Is a Middle Ground
		The Case of the Sentencing Hearing
	Professional Standards
		Professional Standards of Objectivity
		Conflicts of Interest
		Objectivity and Investigating Facts
	The Data Sleuth Process
		Client Onboarding
		The Case of the Next-Day Deposition
		Risk-Based Analysis
		Case Planning
		Key Interviews
		Open-Source Research
		The Case of the Missing Inventory
		Data Analysis
		Other Data Sources and Evidence
		Subject Interviews
		Communication of Findings
	Notes
Chapter 3 The Data Sleuth Necessity
	Forensic Accounting Engagements versus External Financial Statement Audits
	The Evolution of Forensic Accounting
	The Case of the Cash Back Payroll Scheme
	Start with the Evidence, Not the Scheme
	The Case of the Gambling Executive Director
Chapter 4 Data Sleuth Considerations
	Investigations Affect Real People
	The Case of the Nonexistent Inventory
	The Fraud Formula
	Staying on Task with Purpose in Mind
	The Investigation Decision Tree for a Data Sleuth
		Ensure the Allegations Fall Within the Investigator’s Expertise
		Identify Analysis and Evidence Required to Verify Allegations
		Verify the Legitimacy of the Allegations
		Investigate with Client Goals and Possible Recovery Avenues in Mind
	Recovery Avenues
		Recovery Avenue: Criminal Prosecution
		Recovery Avenue: Civil Proceedings
		Recovery Avenue: Insurance Reimbursement
	The Case of the Man Cave
	Notes
Chapter 5 Client Communication and Involvement
	The Case of the Initial Client Meeting
		Client Inquiry and Initial Meetings
		Initial Client Meetings
	Client Expectations
	Data Procurement
	Client Involvement During an Investigation
		Client Feedback
		The Case of the Overlooked Loss
	Ongoing Client Communication
Chapter 6 The Data Sleuth Case Plan
	The Data Sleuth Process
		The Case of the Duplicate Payroll
	The Client’s Investigation Priorities
	Evaluate the Subject’s Access through Risk-Based Analysis
	Data Sleuth Analysis Framework
		Data Sleuth Analysis Framework Applications
		Case Example: Estate Dispute
		Case Example: Embezzlement
		Case Example: Partnership Dispute
		Case Example: Divorce
		Case Example: Economic Damages
	From Conceptual Venn Diagram to Comparative Data Analysis
	The Data Analysis Plan
		Investigation Priority Number 1
		Investigation Priority Number 2
		Investigation Priority Number 3
	Data and Information Gathering
	Communication of the Case Plan
	The Case of the Duplicate Payroll – Conclusion
Chapter 7 Risk-Based Analysis
	The Case of the Puzzling Entries
		Focus on Cash
		Money In
		Money Out
		Accounting Records and Interviews
		The Benefits of Risk-Based Analysis
		The Case of the Puzzling Entries – Conclusion
	Risk Focus in Audits versus Risk Focus in Investigations
	The Case of the Mom of the Year
		Consideration of Risk in Fraud Investigations
		Money In
		Money Out
		Case Findings 1
		Altered Bank Statements
		Case Findings 2
		The Case of the Mom of the Year – Conclusion
	Evaluating Risk in Divorce Cases and Estate and Trust Disputes
		Divorce Cases
		Estate and Trust Disputes
Chapter 8 Data Sources and Data Processing Techniques
	Data Sources Explained
	Quantitative and Qualitative Data Sources
	Data Sources for Quantitative Evidence
		Standard Data Sources
		Nonstandard Data Sources
	Data Sources for Qualitative Evidence
	Using Quantitative and Qualitative Data Sources
	Data Processing Techniques
	Relevant Period
	Getting Organized Before Beginning Data Processing
	Considerations Before Processing Data
	Account Scheduling Steps
	Formatting Account Schedules and Normalizing Payees
	Note
Chapter 9 Standard Data Sleuth Analyses: Comparative Analysis and Source and Use Summaries
	Comparative Analysis
	The Case of the Cash Flow Fiasco
	Source and Use Summary and Analysis
	Bank Account Source and Use Analysis
		Sources (Deposits/Credits)
		Uses (Expenditures/Debits)
		How to Use the Bank Account Source and Use Summary Results
	Credit Card Account Source and Use Summary
		Sources (Payments/Credits)
		Uses (Purchases/Advances/Balance Transfers/Other Charges)
		How to Use the Credit Card Source and Use Summary Results
Chapter 10 Standard Data Sleuth Analyses: Interesting Data Findings, Risk Indicator Analysis, and Payroll Analysis
	Interesting Data Findings
		Standard IDF Data Analysis Tests
		Benford’s Analysis
		Even-Dollar Amounts
		Large Individual Payments
		Month-Over-Month Pivot Table
		Extract Detailed Transactions from Source and Use Summaries
		Using Accounting Records in the Interesting Data Findings Analysis
		Create an Interesting Data Findings Summary
	Risk Indicator Analysis
		Risk Indicator Analysis Steps
		Example for Using Risk Indicator Analysis
	Payroll Analysis
		Ghost Employees
		Data Analysis Test: Number of Employees
		Data Analysis Test: Duplicate Social Security Numbers
		Data Analysis Test: Employee Records without Addresses
		Data Analysis Test: Employee Records with Duplicate Addresses
		Data Analysis Test: Total Risk Indicators and Comparing to Payroll Records
		The Case of the Limited Payroll Records
	Overpayments of Payroll
		Data Analysis Test: Pay Date Review
		Data Analysis Test: Even-Dollar Payments of Net Pay and Expense Reimbursements
		Data Analysis Test: Days of the Week
		Data Analysis Test: Large Individual Payments
		Data Analysis Test: Number of Payments to Employees Per Month
		Risk Indicator Analysis and Comparative Analysis
		The Case of the Overpaid Administrator
	Notes
Chapter 11 Findings, Reports, and Testimony
	Findings
	Reports
	A Report for Criminal Charges
	Report Recommendations for Law Enforcement Referral
	An Expert Report for Civil Litigation
	An Expert Report for Insurance Reimbursement
	Report Organization Recommendations
	Testimony
	Notes
Chapter 12 Practice the Data Sleuth Process
	Review of the Data Sleuth Case Plan
	Review of Data Sleuth Data Processing
	Review of the Data Analysis Plan and Standard Data Sleuth Analyses
	Case Study 1: The Case of the Disappearing Business
		Case Study 1: Exercise 1
	Case Study 2: The Case of the Sneaky CFO
		Case Study 2: Exercise 1
		Initial Client Meeting with Jack
		Case Study 2: Exercise 2
Chapter 13 The Cases that Went Wrong
	The Client Who Believes He Was Wronged
		The Case of the Inaccurate Insurance Claim
		The Case of the Unreconciled Cash Drawer
	The Client Whose Decisions Affect an Investigation
		The Case of the Overworked Office Manager
		The Office Manager
		The Analysis
		The Interview
		The Client’s Decision
Chapter 14 Data Sleuth Expansion
	Data Sleuth Empowers the Curious
	Data Sleuth Divisions
	Public Accounting Firms
	Consulting and Advisory Firms
	The Case of the Phony Professional
	Law Firms
	Law Enforcement
	The Future of Data Sleuth
	Data Sleuth as Prevention
	Licenses, Credentials, and Professional Development
Appendix: Case Study Exercise Solution Recommendations
	Case Study 1: Exercise 1 – Solution Recommendations
		How Much Inventory Was Stolen by Denise for Her New Store?
	Case Study 2: Exercise 1 – Solution Recommendations
		Money In
		Money Out
	Case Study 2: Exercise 2 – Solution Recommendations
About the Author
About the Website
Index
EULA