Accounting: the Forensic Accounting Who Fought Whiet Collar Crime

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  • Topic: Fraud, Accountant, Certified Fraud Examiner
  • Pages : 5 (1767 words )
  • Download(s) : 50
  • Published : February 13, 2013
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Abstract

The global increase in fraud has caused many people to lose trust in accountants. However, experts in the field of Forensic Accounting, such as Certified Fraud Examiners, are restoring ethics and trust by fighting to deter white-collar crimes. The most prevalent type of fraud encountered is occupational fraud. Under occupational fraud the most common and consequential schemes are asset misappropriation and fraudulent statements. Due to the rapid increase of occupational fraud, organizations have implemented anti-fraud controls. Statistics have shown that these controls have helped to decrease the likelihood of fraud. This examination of Forensic Accounting points out the importance of Certified Fraud Examiners in the economic, business, and financial fields within the International Community.

Forensic Accounting: Fighting White Collar Crime

When asked about ethical issues in the field of accounting, Raymond Reisig, both a Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE), stated that ethics is the foundation which accounting stands on because “Our whole profession depends on people trusting us.” However, due to the lack of ethics in many large companies involved with fraud, the public has lost faith in the accounting profession. Hoping to restore the trust of society, many companies worldwide have incorporated Forensic Accounting into their industries. Essentially, the secret to uncovering fraud is by following a trail of money that will eventually lead to evidence that proves where the money has gone. This has been the job of Certified Fraud Examiners for years. A number of different types of frauds occur daily, but the most prevalent type of fraud that seems to catch the public’s eye is occupational fraud. Everyday, Certified Fraud Examiners are working hard to fight off occupational fraud in corporate America. According to the Association of Certified Fraud Examiners (ACFE), occupational fraud is “the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets” (2010, p. 6). Occupational fraud has now become a global problem, which has substantially increased the demand for forensic accounting. Forensic accounting is one of the many branches in accounting; under this specific branch exists Certified Fraud Examiners. Certified Fraud Examiners are experts specifically trained to find fraud, detect the ways in which the fraud was committed, and uncover who may have committed the crime. Two of the many schemes under occupational fraud that certified fraud examiners are confronted with are asset misappropriation and fraudulent statements. “Report to the Nations”, a worldwide study of 1,843 cases of occupational fraud from 2008-2009, found that in the U.S. “Asset misappropriation schemes were the most common form of fraud… representing 90% of all cases” (ACFE, 2010, p. 4). Asset misappropriations range from conspiracies like skimming, when an employee does not record a sale and instead pockets the money, to schemes like check tampering, when an employee steals blank checks from the company and writes them out to himself. However, the most common fraud is billing. Billing happens when an employee deceives his employer to make false payments by submitting invoices for fictitious goods or services. One example of this could be found in a recent report in The New York Times. Anita Collins, 67, who is being charged for grand larceny in the first degree, for embezzling over $ 1 million over seven years from the Archdiocese of New York. Anita was able to skillfully delude the Catholic Church by sending fictitious invoices to the Archdiocese and issuing 468 checks to accounts she controlled (Otterman 2010). Billing alone can cause an organization to lose, on average, $128,000 annually. Although Asset misappropriation is the most common type of fraud, according to “Report to The Nations” it is...
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