Some Tales from the Far Side of Forensic Accounting

• In Event: Earnings Management, Modifying Auditor Exposure, Enhancing Skepticism, and Fraud Tales

Abstract

Accounting in general is all too often mischaracterized as a pedantic, verging on boring,
profession. However, as any experienced CPA knows, accounting, particularly forensic
accounting, can be a challenging and often times exciting practice. This article provides a
number of broad ranging examples of actual fraud investigations experienced by the authors. The
cases have been presented in the context of the applicable professional codes that govern the
requirements for the review of these fraudulent situations. Inventory sleight of hand, cash
misappropriation, check-kiting, tax evasion, and ghost employees, among others, are fraud cases
discussed in detail including the detection methodologies and the variety of professional codes and standards that are applicable for both detection and prevention. These examples give the
experienced auditor real life reminders of the need for professional skepticism, courage, and
persistence and provides the beginning auditor or forensic accountant with potential insights into
this challenging but interesting field of accounting. All accountants must continually be aware that there are as many different types of fraud as there are types of people so constant vigilance is a necessity.

Authors

• Donald Lamar Ariail, Southern Polytechnic State University

• Donald Larry Crumbley, Louisiana State University - Baton Rouge

• Jerry B Hays, Nova Southeastern University