Assignment 3: Using Teams in Production and Operations Management
BUS 508 – Contemporary Business

Forensic Accountants Forensic accounting is accounting that result from actual or anticipated legal disputes. Forensic accountants are the auditors of the forensic accounting practice. They investigate, coordinate data and offer their evidence in trial; and because it is forensic business, the evidence they find is suitable to present and will hold its proof in a court trail. Forensic accountants usually engage in different sectors of the business world; economics, finance, accounting, business management and marketing, to name a few. They utilize their understanding of these different sectors to gather and investigate data that will be used in litigation. Currently though, we live in a world in which financial fraud is becoming increasingly more prevalent. Forensic accountants are expanding their roles and venturing into financial fraud prevention. Forensic accountants are utilizing their skills and designing policies to reduce the risk of fraud, and working closely fraud deterrence research. To be a forensic accountant, the individual needs to possess certain skills and abilities to effectively perform the tasks at hand. A forensic accountant needs to have excellent communication skills, both in oral and the written language. Communication is the effective way to convey thoughts, messages and information. It requires the individual to actively convey the message to the receiving party. The communication is complete when the receiving party has understood the message. In their search for evidence, among data that may be or may not be written, forensic accountants need to talk to people. Communication with people across various business divisions needs excellent communication skills in oral and written language. For example, one may need to interview department accountants and record their information. Written communication skills come at play in this situation. Once has to effectively communicate oral thoughts and accounts into a written message that will make sense and correctly portray the accounts at hand. When testifying in the court room, the forensic accountant also needs to organize the information in a professional manner for presentation to the judge. With this example, the forensic accountant must also possess the ability to convey layman terms into legal verbiage that is conducive to the court room. There is also the need to communicate the same information orally (Albrecht, Albrecht, & Zimbelman, 2011). Hence, it is an important skill to have and master. Since forensics refers to the ability to present evidence in court, knowledge of the court systems and the law is important. A forensic accountant needs to have knowledge of the relevant laws as well as experience regarding court procedures. The forensic accountant must also understand that laws vary from state to state and that federal laws always apply. There also needs to be an intrinsic understanding that not only must the forensic accountant need to have legal knowledge, but also keep abreast of changes, amendments and modifications. Knowledge of the relevant laws is important because organizations, businesses and individuals operate under different laws. These laws apply especially while presenting a case in the court room. The knowledge of the law sometimes is not enough; the need to have real experience in presentation of evidence in the court. This is what distinguishes experienced and un-experienced forensic accountants. As it is often stated “how you say something is just as good as what you are saying.” It is also vital knowledge of how to file court procedures as well as which ones to file. Another important skill is this field is an inquisitive mind. A good forensic accountant is not just knowledgeable in the financial aspect of the job; the individual needs to be astute and inquisitive. Often, information and data is maliciously concealed by rogue accountants who may not want to be exposed. An inquisitive mind makes the forensic accountant be capable of looking at a financial case and statements from different viewpoints. The forensic accountant needs this tact and the ability to be intrusive and find ways to examine the evidence to appropriately conduct an investigation. This is important because accounting frauds are difficult to capture and trace. Fraud is an intentional deception for personal gain. An inquisitive mind comes in handy especially when one is dealing with large volumes of data and information with tight deadlines. The ability to seek, search and uncover hidden truths is an ideal skill to possess as a forensic accountant. More than just a standard financial accountant, a forensic accountant needs to possess a skill that pays particular attention to detail. This is particularly important when dealing in large volumes of information and data than a normal financial accountant would skim through or not really deeply assess. By paying attention to detail, the forensic accountant may see something that otherwise would be ignored or bypassed. It requires the ability to see the evidence in different views and from different standpoints to correctly assess and interpret the evidence. This skill is what makes one a forensic accountant while the other party is a financial accountant. Attention to detail is important because in business environments, often companies involve themselves in multiples of different business transactions that if it were not for this skill, fraud cases would go unnoticed for a long time. A contemporary skill for forensic accountant would be an ability to deal with very large amounts of documentary evidence with adherence to tight deadlines. This is because many organizations in pursuit of minimizing costs will only keep a small department or just hire forensic accountants on time based contracts (Cendrowski, Martin, & Petro, 2006). The ability to deal with a lot of information in limited periods of time therefore becomes an invaluable skill. Not only does the skill involve looking at printed material evidence, but also the possibility of evaluating electronical data. In a day in age where we live in an ‘E-World,’ knowledge and skill in assessing large amounts of e-data and effectively interpreting it is key. In majority of the cases, a forensic accountant in a courtroom environment acts an investigator in criminal and civil cases. The forensic accountant may also make recommendations in a court of law. In majority of those cases and reports, investigation has to be done before the findings can be availed in a court of law. For example, a forensic accountant may be called upon to search for some hidden assets in a divorce case (Kranacher, Riley, & Wells, 2010). In a courtroom environment, many cases involving forensic accountants have often been in relation to civil matters. But lately, due to the increases of financial fraud, forensic accountants often are involved in cases that have a criminal undertaking. As an investigator they must investigate and gather evidence to be present in court. The forensic accountants are actually, in a way, acting as a medium for upholding the law in relation to accounting and finance. In ongoing cases in a courtroom environment, forensic accountants are frequently hired to give professional recommendations in regard to actions that must be taken so as to minimize business loss or risks. Therefore, the skills already discussed above come in handy because these recommendations require one to be a skilled in communication in both written and oral language. As part of a litigation process therefore, forensic experts offer expert witness testimonies in courtroom environments. While providing service to a business establishment, a forensic accountant has a legal responsibility of maintaining the public interest in mind. Free from any interests that may be incompatible to the fundamental principles of the discipline ensures that one maintains objectivity and integrity of the code; there cannot be any conflicts of interests. This is in relation to the introduction and fundamental principles of the forensic accounting code. For those forensic accountants in the public practice, they have to conform to section 220 and 280 that deal with conflict of interest and objectivity-All services code (Accounting Professional and Ethics Standards Board, 2008). It is of note to remember that besides courts of law, there are also courts of public opinion. Maintaining the best interest for the public is very important to recognize and realize. Also, forensic accountants have a legal responsibility of maintaining professional independence, professional competence and due care, confidentiality, professional engagement matters and expert witness services. Essentially, forensic accountants must act with professionalism at all times. All these fundamental codes of conduct are put in place because whether serving for the defendants or the plaintiffs in civil and criminal cases, forensic accountants have immense power in deciding cases in courtroom environments. Also, these codes and legal responsibilities are put in place to protect clients who often have sensitive confidential information that is crucial in competitive business ventures (Duff and Phelps, 2010). In essence therefore, forensic accountants are supposed to maintain objectivity in their investigations and their dealings so as to be of the best interest to all involved parties in business and legal fields. In the case pertaining to Duff and Phelps, Duff and Phelps were called upon to evaluate and give an expert’s opinion on a company’s bankruptcy. The role of this forensic accounting company was to evaluate and determine whether the filing of the bankruptcy was due to payments and expenditures that were unauthorized. After a review of the items, the items were determined and linked to one of the company’s executives who had also been instrumental in causing the company’s bankruptcy (Duff and Phelps, 2010). Duff and Phelps were again the team concerned in this case that was termed as the largest criminal tax case in the history of the US whereby they were to advise the counsel on defending an individual in the case. This forensic accounting firm, by use of numerous investment and bank accounts they reconstructed the assets and history of the defendant going back 6 years. The defendant held real estates and bank accounts that he held by names of other entities and related individuals. The company dug deeper, and used their inquisitive skills, and investigated the sources of funds as well as the use by use of financial records. It reviewed tax returns and then traced income from property transactions so as to identify total assets held during that period of time. The firm established investment and bank accounts previously unknown by the counsel. The source and use of more than 60 million dollars was declared with extra 25 million dollars emanating from real estate transactions (Duff and Phelps, 2010). Another case example can be that of what occurred at the Enron energy corporation. It was revealed that Enron was involved in planned accounting fraud. Forensic accountants were used to investigate and report the actual and true financial condition of the company. The Enron ‘scandal’ brought into question the accounting practices and activities of many corporations, it resulted in the dissolution of Anderson Accounting for falsely reporting financial accounts, and created legislation in the US to deter financial fraud. Forensic accountants are essentially fraud busters. They possess skills that enable their work to be utilize in a court of law, effectively communicate and investigate data to present in court, provide evidence in a courtroom environment and have legal responsibilities to business, individuals and the public. As a result of real-life cases, financial accountants, through their work, have assisted in creating financial fraud deterrence policies; policies that can protect us.

Resources
Boone, L. E. & Kurtz, D. L. (2012 Update). Contemporary business (14th ed.). Hoboken, NJ: John Wiley & Sons.
Boone, L. E. & Kurtz, D. L. (2012 Update). Contemporary business. Available from https://blackboard.strayer.edu/webapps/portal/frameset.jsp?tab_tab_group_id=_168_1&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCourse%26id%3D_70174_1%26url%3D
Accounting Professional and Ethics Standards Board. (2008, December). Forensic Accounting Services. Retrieved on August 12, 2012, from http://www.publicaccountants.org.au/media/32890/apes%20215%20standard_1.pdf
Albrecht, W. S., Albrecht, C. C., & Zimbelman, M. F. (2011). Fraud Examination. Farmington Hills: Cengage Learning.
Cendrowski, H., Martin, J. P., & Petro, L. W. (2006). The Handbook of Fraud Deterrence. New Jersey: John Wiley & Sons.
Duff and Phelps. (2010). Fraud, Forensic and Investigative Services. Retrieved on August 12, 2012, from http://www.duffandphelps.com/SiteCollectionDocuments/dcfas_insert2.pdf
Kranacher, M.-J., Riley, R., & Wells, J. T. (2010). Forensic Accounting and Fraud Examination. Hoboken: John Wiley & Sons.