Finance and Treasury

Forensic Accounting and Financial Statement Fraud Detection

Financial statement fraud is committed by people who know the accounting standards better than the person reviewing the numbers, and it hides in judgement rather than in arithmetic. This course is about the accounts themselves. Delegates work through the pressures that produce misstatement and the reporting periods when it appears, then through revenue recognition schemes: cut off manipulation, channel stuffing, bill and hold, and round tripping. Expense and liability schemes follow, including capitalisation of costs that should be expensed and understated provisions. Reserve manipulation and earnings smoothing are covered. Off book entities and related party transactions are addressed. Analytical detection is worked through practically: ratio and trend analysis, cash flow against earnings, and digit distribution testing. Working paper and disclosure review follow. The course closes on quantifying a misstatement and on writing findings for an audit committee.