Financial Fraud Case Study

Financial Statement Fraud Investigation
Frisbey (2015) indicated that forensic accountants should be able to effectively communicate with the management and involved personnel as to the factors of the existence of fraud indicators, to be able to perform essential analytics and independent testing such as horizontal and vertical testing techniques to detect fraud or to examine the validity of evidence being investigated (p.8-9). Frisbey mentioned that forensic accountants should, for example, request and review documents such as contracts and supporting invoices and deliveries; confirm with clients on the existence receivables and consignment contracts; research public records, conduct site visits, background checks of vendors; analyze journal
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However, I am personally in agreement with the other findings to closely pay attention to the disclosure statements and textual statements because it is as vulnerable as financial metrics, which provide syntactical cues to conceal fraudulent activity by deliberately misleading financial statement users by purposely using presentation style, uninformative verbiage, complex, difficult and selective accounting terminology, positive tone, passive voice, adverse message and uncertainty markers. On the other hand, on the research results in investigating the techniques on detecting financial fraud, I think is more focus or elaborate on traditional fraud investigation techniques, which involves surprise sampling, site visits to vendors and clients and random testing. The historical fraud investigation strategies could use some enhancement using the highly technological data analytics software and ERP systems. Although, I agree the part where the research implies the importance of in depth knowledge of the business process and policies you are investigating, while performing …show more content…
Characteristics and skills of forensic accountant. Retrieved from
Abbasi, A., Albrecht, C., Vance, A., & Hansen J. (2012). Metafraud: A meta-learning framework for detecting financial fraud. MIS Quarterly, 36(4), 1293-1327. Retrieved from
Albrecht, W. S., & Hoopes, J. L. (2014). Why audits cannot detect all fraud. CPA Journal, 84(10), 12-21. Retrieved from
Committee of Sponsoring Organizations of the Treadway Commission (COSO, 2010). Fraudulent Financial Reporting (1998-2007). Retrieved from
Frisbey, E. B. (2015). Fraud on revenue recognition. Franklin University ACCT732 Forensic Accounting Research Paper, 1-19. Retrieved from
Goel, S., & Gangolly, J. (2012). Beyond the numbers: Mining the annual reports for hidden cues indicative of financial statement fraud. Intelligent System in Accounting, Finance & Management, 19(2), 75-89. Retrieved from

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