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ForensicAccountingTechniquesandStrategies

1. SomeKeyConcepts

a. Information Synthesizingmassiveamountsofinformationefficientlyandeffectivelyiscritical

b. EvidenceDocumentsandemailsusuallydonottellthewholestory;interviewsarecriticaltounderstandingthefullpicture

c. Analysis Analysisisguidedbyirregulartransactionsorpatterns

d. QuestioningMind Averyhighlevelofprofessionalskepticismiscritical

e. FindingtheTruthhalftruthsareusuallymoredangerousthanstraightlies

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2. InformationPreservationandCollection

a. Litigationholdsandpreservation

b. Capturingandimagingharddrives,serversandotherelectronicinformation

c. Freezingkeyaccountingserversanddatabases

d. Desk,officeandcommonareahardcopydocumentcollections

e. Processingandhostingofkeyinformation

f. DataPrivacyconsiderations

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3. UnderstandingStructureandOrganization

a. Obtainingdetailedunderstandingofentityandcorporatestructure

b. Understandingmanagementhierarchyandreportingstructure

c. Identifyingrelatedpartyrelationships

d. Identifyingjointventuresorotherbusinessrelationships

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4. AnalyzingInformationCollected

a. Segmentingthecustodianpopulation

b. Useofsearchterms

c. Documentsv.Emailsv.Transaction/Accountinginformation

d. Linkingdisparateinformationsources

e. Validatingthatsuspicioustransactionsactuallywererecorded

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5. ReviewingEmailandOtherElectronicCorrespondence

a. Focusingonkeyconstituencies

b. Searchterms

c. Datesandtimesreceived

d. Primarysenders/recipientsversuscc/bccsenders/recipients

e. Linkagetokeydocumentaryevidence

f. Riskofjumpingtounvalidatedconclusions

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6. Ledgers,JournalEntry,andTransactionDocumentationReview

a. Electronicinformationhighlydesired

b. Identificationofkeyledgers

c. Summaryledgershelpconfirmwhatwasactuallyrecorded

d. Detailedledgers identifyaccountmovementsandtransactionaldetails

e. JournalEntriesrepresentthegrassrootsoftheaccountingprocess

f. Identifyproblematicaccounts,transactions,andentries,thenlinkwithdocumentary/emailsupport

g. Relatedpartytransactionreview

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7. AccountingReview ClosingProcessandSelectedAccounts

a. Understandingquarterendandyearendcloseprocesses

b. Reviewoflateormanualjournalentries

c. Reviewofsubjectiveaccruals,reserves,andotherestimates

d. Reviewoflargerevenuetransactions

e. Reviewoflargeandevendollaramountitems

f. Itemswithverygeneralornodescriptions

g. Itemsovercertaintransactionapprovalthresholds

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8. ReviewofCashManagementandCashFlowProcesses

a. Understandingandreviewingcashmanagementsystemsandprocesses

b. Understandingbankaccountstructureandkeyaccounts

c. Reviewingdailymovementsofcash

d. Grossversusnetcashpresentations

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9. AnalyzingBudgets,Internal/ExternalExpectations,IncentiveTriggers,andReportedResults

a. Understandingthepurposeandvarietyofbudgetdocumentation

b. Understandinginternalexpectations

c. Understandingexternalexpectations

d. UnderstandingIncentiveTriggers

e. Comparingbudgets,expectations,andreportedresults

f. Linkingdocumentaryevidencetoemailandotherconversationalevidence

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10.Interviewsa. Accounting

b. Financialreporting

c. Operations

d. Othersupportareas(corpdevelopment,legal,investorrelations);

e. Internalaudit

f. Thirdparties(auditors,legaladvisors,transactioncounterparties,businesspartners,vendors)

g. Management

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11.ReviewingWorkofAuditorsa. InternalAuditors

i. reviewofauditreportsandreportstotheboard

b. ExternalAuditorsi. Keyauditdocumentation

ii. Auditplanning

iii. Auditfieldwork

iv. Auditresults

v. Frauddetectionwork

vi. NationalOfficeconsultations

vii. Proposedandfinaladjustments