01-28-2005, 06:46 AM
Forensic accounting covers two broad areas litigation support and investigative accounting. The AICPA describes litigation services as "any professional assistance non lawyers provide to lawyers in the litigation process."5 Forensic science may be defined as the application of the laws of nature to the laws of man.6 "Forensic scientists examine and interpret evidence and facts in legal cases and offer expert opinions regarding their findings in courts of law."7 David Akst and Lee Berton indicate that other accountants may look at the charts, but forensic accountants actually dig into the body.
Although the billings rates for litigation support tend to exceed the rates in other practice areas, a more exciting area of forensic accounting is the investigative accountant or fraud auditor. Since 1992, Price Waterhouse has doubled its number of forensic accountants to 500; Coopers and Lybrand are at 380 forensic accountants (1996). The AICPA indicates that this person searches for evidence of criminal conduct or assists in the determination of, or rebuttal of, claimed damages.10 They question seemingly benign documents and look for inconsistencies.
Skills of a Forensic Accountant can be seen in the following passage Jeff discovers the over-all conspiracy
"Wait a minute," Jeff shouted to himself. He immediately retrieved the tax return of the Martinsburg coin outlet. How can the Martinsburg shop have a net operating loss and receive a tax refund if the wholesale parent company is filing a consolidated tax return? Like a thunderbolt, the answer came to him. He almost shouted, "They can't do both! When a group of affiliated corporations files a consolidated tax return, the parent corporation files the return and receives any refund--not the individual businesses."
"Wow! This company is ripping off more than two hundred million dollars a year from the government!" Jeff whispered to himself. "They're sending in double tax returns. Each outlet send in a separate return and receives a refund. The parent corporation files a consolidated tax return and receives a refund. The parent corporation files a consolidated tax return and turns its sixty-two million dollars taxable income into a refund of one hundred and sixty-two thousand dollars." [pp. 140-141]
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If I could... Then I would... Turn back time!!
Edited by - desert sleet on Jan 28 2005 015551 AM
Although the billings rates for litigation support tend to exceed the rates in other practice areas, a more exciting area of forensic accounting is the investigative accountant or fraud auditor. Since 1992, Price Waterhouse has doubled its number of forensic accountants to 500; Coopers and Lybrand are at 380 forensic accountants (1996). The AICPA indicates that this person searches for evidence of criminal conduct or assists in the determination of, or rebuttal of, claimed damages.10 They question seemingly benign documents and look for inconsistencies.
Skills of a Forensic Accountant can be seen in the following passage Jeff discovers the over-all conspiracy
"Wait a minute," Jeff shouted to himself. He immediately retrieved the tax return of the Martinsburg coin outlet. How can the Martinsburg shop have a net operating loss and receive a tax refund if the wholesale parent company is filing a consolidated tax return? Like a thunderbolt, the answer came to him. He almost shouted, "They can't do both! When a group of affiliated corporations files a consolidated tax return, the parent corporation files the return and receives any refund--not the individual businesses."
"Wow! This company is ripping off more than two hundred million dollars a year from the government!" Jeff whispered to himself. "They're sending in double tax returns. Each outlet send in a separate return and receives a refund. The parent corporation files a consolidated tax return and receives a refund. The parent corporation files a consolidated tax return and turns its sixty-two million dollars taxable income into a refund of one hundred and sixty-two thousand dollars." [pp. 140-141]
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If I could... Then I would... Turn back time!!
Edited by - desert sleet on Jan 28 2005 015551 AM