Fraud Examination Casebook with Documents: A Hands–on Approach

PRAISE FOR FRAUD EXAMINATION CASEBOOK WITH DOCUMENTS

"As a White Collar prosecutor for over 25 years and a law school adjunct professor, I can attest that Professor William Beecken and Clark Beecken are recognized authorities in the area of forensic auditing. Their book Fraud Examination Casebook with Documents: A Hands–on Approach is an invaluable educational tool for anyone seeking to learn how to identify deceptive behavior and fraud, particularly in financial statements. The simple, easy–to–understand chapters coupled with real–world financial documents provide a wonderful bridge between theory and application. It is a must have for any forensic auditing course."
John Melvin, Chief Assistant District Attorney, Cobb Judicial Circuit; Adjunct Professor, Atlanta′s John Marshall Law School

"This book is the first of its kind, a practical textbook with real life examples of how to conduct a fraud examination. The case studies are an invaluable resource for any teacher in this field, as well as any student who wants to learn how to be effective in the field of Fraud Examination and Forensic Accounting."
Laurie Dyke, Managing Partner, IAG Forensics and Valuation

REAL–WORLD EXPERIENCE IN START–TO–FINISH CASEWORK

Fraud Examination Casebook with Documents is a first–of–its–kind practical resource for applying a conceptual knowledge of fraud to full–length fraud examinations. Respected guidance from an authorial team with acclaimed academic and in–the–field experience supports your analysis and presentation of five cases as they′d come across your desk in actual practice. The cases focus on asset misappropriation and financial statement fraud, and they′re presented with all the obstacles and pitfalls of real assignments. Thought–provoking multiple–choice questions enable you to efficiently reinforce and gauge your applied mastery of fraud examinations. Dedicate yourself to working through the cases inside and cultivate the ability to:

Conduct a complete fraud examination, from predication through report Present your findings with the comprehensive flawlessness required in unforgiving courtrooms Gain a competitive edge over everyone with mock trial and professional experience in a peripheral field

No other training resource more accurately simulates real life than Fraud Examination Casebook with Documents.

Preface

Overview of the Serial Fraud Cases

(A Family of Fraudsters)

Fraudulent Financial Statements

Check Fraud, Debit Card Fraud, Cash Larceny

Fraudulent Edits/Adjusting Journal Entries to Cash Receipts

Excel Pivot Analyzes and Summarize a Huge Amount of Data

Tracing Excel Pivot Red Flags Back to Source Documents and Documenting the Flow of Money

Case 1: Fraudulent Financial Statements

1–1 Larsen s Convenience Store: Using Analytical Procedures in Detecting Financial Statement Fraud

1–2 How to Perform a Horizontal, Vertical, and Ratio Analysis

1–3 Exercises Fraudulent Financial Statements (Larsen Convenience Store)

1–4 Exercise Templates

1–5 Review Questions Fraudulent Financial Statements (Larsen Convenience Store)

Case 2: Check Fraud, Debit Card Fraud, Cash Larceny

2–1 Anderson Internal Medicine: Preparing a Bank Reconciliation and Spreading /Analyzing Transactions on Monthly Statements from Financial Institutions

2–2 How to Perform a Bank Reconciliation

2–3 How to Read Checks and Decode Debit Card Transactions

2–4 How to Spread and Analyze Check and Debit Card Transactions

2–5 Exercises Check Fraud, Debit Card Fraud, & Cash Larceny (Anderson Internal Medicine)

2–6 Exercise Templates

2–7 Review Questions Check Fraud, Debit Card Fraud, & Cash Larceny (Anderson Internal Medicine)

Case 3: Fraudulent Edits/Adjusted Journal Entries

3–1 Anderson Internal Medicine (Edits/AJEs): Vouching from a schedule (e.g., data extraction of edits/adjusting journal entries) to source documents (e.g., deposit slips and bank statements).

3–2 How to Vouch/Trace between a Source Document and an Accounting Ledger, Journal, or Activity Log

3–3 Exercises – Fraudulent Edits (or AJEs) (Anderson Internal Medicine)

3–4 Exercise Template

Case 4: Using Data Analytics: Analyzing and Summarizing Data with Excel Pivot

4–1 Anderson Internal Medicine (Data Analytics): Using Data Analytics Analyzing and Summarizing Data with Excel Pivot

4–2 How to Use Excel Pivot to Analyze and Summarize Data

4–3 Exercises – Using Data Analytics (Anderson Internal Medicine)

4–5 Review Questions Using Data Analytics (Anderson Internal Medicine)

Case 5: Tracing Data Analytics Red Flags Back to Source Documents Using Subpoenas

5–1 Anderson Internal Medicine & Larsen Convenience Store (Conspiracy & Loan Fraud): Trace transactions discovered during data analytics back to source documents using subpoenas

5–2 How to Write Wording to Subpoena Documents, Information, and/or Objects

5–3 Exercise – Anderson Internal Medicine & Larsen Convenience Store (Conspiracy & Loan Fraud)

Case 6: Reports, Schedules, and Audio–Visuals

6–1 Writing a Fraud Examination Report

6–2 Formatting Schedules for Inclusion with Reports

6–3 How to Simplify the Complex with Audio–Visuals

Case 7: Documents

7–1 Larsen Convenience Store

Recorded Interview Gregory Larsen

Authorization for Release of Financial Records

Sworn Statement Proof of Loss

2013 IRS Individual Tax Returns (Schedules C)

2014 IRS Individual Tax Returns (Schedules C)

2015 IRS Individual Tax Returns (Schedules C)

2014 SBA Personal Financial Statements

2015 SBA Personal Financial Statements

2016 SBA Personal Financial Statements

Transcripts 2015 Sales & Use Taxes per Form ST–3

Shamrock Groceries 2015 Purchase by Month

Georgia–Tennessee Fuel Partners 2015 Purchase by Month

Marietta Beverage Company 2015 Purchase by Month

Discount Tobacco Supply 2015 Purchase by Month

Jenkins Media Service 2015 Purchase by Month

10–30–15 Physical Inventory

7–2 Anderson Internal Medicine

Bank Reconciliation April 1, 2016 Tonya Larsen

Bank Statement March 2016

Canceled Checks (Front)

Canceled Checks (Back)

Deposit Tickets March 2016

Cash Receipts Journal March 2016

Cash Disbursements Journal March 2016

7–3 Anderson Internal Medicine (Edits/AJEs)

Report of Interview Jennifer Anderson, MD

Data Extraction 203–Tonya Edits

Deposit tickets January through March 2016

7–4 Anderson Internal Medicine (Excel Pivot)

Excel spreadsheet Details of Transactions in Bank of Lawrenceville

September 2015 through February 2016

7–5 Anderson Internal Medicine and Larsen Convenience (Husband/Wife Bank Fraud Conspiracy)

Report of Interview John Grayson

Credit Application Waleska Bank

Waleska Bank Statement for Greg Larsen December 2015

Front of Official Checks Loan No. 15–3989

Front of Checks for Account 7011176 (Greg Larsen)

Back of Official Checks Loan No. 15–3989

Back of Checks for Account 7011176 (Greg Larsen)

Sample U.S. Court Subpoena to Produce Documents, Information, or Objects or to Permit Inspection of Premises in a Civil Action

Sample U.S. Court Subpoena to Produce Documents, Information, or Objects in a Criminal Case

Sample U.S. Court Subpoena to Testify Before a Grand Jury

Sample U.S. Court Subpoena to Testify at a Deposition in a Criminal Case

Sample U.S. Court Subpoena to Testify at a Hearing or Trial in a Criminal Case

About the Authors

About the Website

Index

WILLIAM H. BEECKEN is director of fraud services for Assurance Forensic Accounting, former ATF senior forensic auditor, and has taught fraud examination for eight years at Brenau and Southern Polytechnic State universities.

CLARK A. BEECKEN is an auditor who conducts forensic audits and forensic data analytics. Previously, he was a senior forensic auditor with Georgia Tech, conducting financial investigations and digital forensics.