A Forensic Accounting Approach to Solving a Fraud

DESCRIPTION:  Forensic accounting is the application of accounting methods and financial techniques to perform an in-depth financial investigation.  These investigations can ultimately result in the prosecution of the fraud perpetrator.  As such, each participant will learn how to identify and document specific events involving the movement of money during the course of a fraud crime.  Each participant will learn how to solve a financial crime with two methodologies: the Direct Method of Proof and the Indirect Method of Proof.  Class

February Full Day Training Member $100.00Non-Member $130.00Student $20.00

instruction will include lecture and solving case studies using both methods.

The Direct Method of Proof methodology is commonly used by a financial investigator to resolve an alleged crime.  Direct proof is achieved when investigative findings identify specific financial transactions involving the suspect.  With this method, the investigator tries to uncover a financial transaction involving illegal funds and then analyze the information obtained from the transaction to identify the parties involved.  Such findings show a direct link between financial transactions, the illegal activity and the suspect.  Direct proof reveals the suspect’s personal involvement and knowledge of the illegal funds used in the financial activity under investigation.  This is the technique commonly used by an agency internal investigator.  As part of the course, specific attention will be spent learning the elements of these frauds: skimming, billing schemes, payroll schemes, and corruption/bribery.

The Indirect Method of Proof methodology is not as commonly used by an agency internal investigator as the direct method, but the evidence obtained can be just as relevant.  This method is used when the movement of money is not reflected in the businesses’s books and records.  The Indirect Method of Proof does not allow the investigator to directly trace transactions to the suspect; instead, the investigator must prepare an overview of the suspect’s financial condition – a financial profile. This is accomplished by uncovering what the suspects owes, owns, earns and spends.  As part of the course, attention will be spent learning the bank deposit method, and the net worth calculation method. Circumstantially, this method shows that the suspect’s expenditures exceed the suspect’s known source of funds.  Even though this technique is not commonly used by internal investigators, this technique can be another tool that can help prove the suspect’s involvement in a fraud. 

About the speaker....

Ransom McClung has an extensive background in investigating and auditing university operations.  Immediately before coming to Florida State University as a Director of Audits and Investigations, he was the Associate Inspector General in the Office of the Chief Inspector General for the State University System.

Ransom has certifications as a CPA, CFE, Cr. FA, and a CFF.  He has a Master of Science Degree in Criminology from Florida State University. He is also an adjunct instructor in the Accounting Department at Florida State University where he teaches undergraduate classes in financial accounting, fraud examination, internal auditing, and forensic accounting.

He has presented fraud-related topics to various organizations, including the Association of College and University Auditors, Association of Certified Fraud Examiners, Southeastern Association of College and University Business Officers, Florida Institute of Certified Public Accountants, and local chapters of The Institute of Internal Auditors and the Association of Government Accountants.