The document summarizes forensic accounting, describing it as the specialty practice area of accountancy used for engagements resulting from actual or anticipated disputes or litigation. It discusses terms like forensic accounting and digital forensics. Applications include fraud investigation, disputes, and mergers and acquisitions. Tools used include financial analytics, investigative techniques, and computer forensics. Credentials for forensic accountants are also outlined.

1. The Forensics Frontier
NTCA 2010 Finance & Accounting Conference
Orlando, Florida
September 9, 2010
Presented By:
William Brown, CPA, CFFA, CFE
Eigen Heald, MsIA, CISSP, GCFA

2. Overview
• Description – What? Who?
• Applications – When? Why?
• Tools and Techniques – How?

3. Description
• Terms and definitions
• Professional standards and credentials
• Contrast with conventional accounting and auditing

4. Terms and Definitions
• Forensics
– “Suitable for use in a court of law.” Forensic accountants generally
work to this standard and toward this potential outcome.
• Forensic accounting
– The specialty practice area of accountancy that describes
engagements that result from actual or anticipated disputes or
litigation.
• Digital forensics
– a branch of forensic science pertaining to legal evidence found in
computers and digital storage media. Also known as computer
forensics

5. Terms and Definitions
• Fraud investigation
– Purpose is to prove or disprove the legal elements of an
offense
• Litigation support
– Any professional assistance provided to lawyers in the litigation
process
– Expert witness vs. expert consultant

6. When do you Need Forensic Accounting?
In practice, forensic accounting is applied anytime
you have reason to believe that you can’t take
numbers at face value, and/or the only data
available doesn’t allow for traditional analysis.

7. Professional Credentials
• Certified Public Accountant (CPA)
• Certified Fraud Examiner (CFE)
• Certified in Financial Forensics (CFF)
• Certified Forensic Financial Analyst (CFFA)
• GIA Certified Forensic Analyst (GCFA)
• Business valuation credentials (i.e. CVA, ABV)
• Management accounting credentials
• Internal audit credentials
• Information technology credentials

8. Contrast with Conventional Accounting &
Auditing
• Investigative
• Reconstructive
• Analytical
• Verifying existing information vs. looking for what’s
not there
• Responsibility and risk vs. cause and source

9. Applications
• Fraud
• Disputes
• M&A

10. Fraud
• Financial statement misstatement
– The deliberate misrepresentation of the financial condition of an
enterprise accomplished through the intentional misstatement
or omission of amounts or disclosures in the financial
statements to deceive financial statement users

11. Fraud
• Asset misappropriation
– The intentional, illegal use of the property or funds of another
person for one's own use or other unauthorized purpose
• Bribery and corruption
– Off-book schemes such as kickbacks, gifts or gratuities to
government employees from contractors or to private business
employees from vendors

12. Disputes
• Litigation, arbitration, mediation, settlement
• Focus on economic damages and lost profits
• Often supports business valuation
• Examples:
– Marital dissolution (divorce)
– Breach of contract
– Business dissolution
– Bankruptcy
– Insurance claims
– Negligence claims

13. Tools & Techniques
• Financial analytics
– Numbers
• Investigative techniques
– People
• Computer forensics
– Data

14. Digital Forensics Case Study
• Wire transfer fraud
– Malware
– Disk imaging
– Documentation
– Data conservation/chain of custody issues
– Online banking risks

15. Summary & Conclusion
• Review
– Description
– Applications
– Tools & Techniques
• When is forensics required?
• What do you do first?

16. Contact Information
Bill Brown
bbrown@bdmp.com
(207) 541-2208
Eigen Heald
eheald@bdmp.com
(207) 541-2311
Forensic & Valuation Services
Telecommunications