FORENSIC ACCOUNTING BA124 Spring 2008Slide 121

1
Todays Topics

• Shenanigan 3
• Consumer Fraud

2
Shenanigan 3-Boosting (Operating) Income

• Technique 1
• Selling of undervalued assets
• Technique 2
• Including investment gains in ops. income
• Technique 3
• Reducing opex by investment gains
• Technique 4
• Reclassifying balance sheet accounts

3
Transparency is Key

• Are the s telling the story or making the story?
• Is the company managing the business or managing
  the s?
• What is, is? versus What is. Is!
• Recall SFAC 1
• Improved decision making
• Insight into future cash flows
• Resource information

4
Shenanigan 3 Specifics

• Table 6-1
• Lets consider each item
• Table 6-2
• Weaselotomy 101
• Dont over-react to pension issues
• Technique 4
• Mark-to-market games

5
Todays Topics

• Consumer Fraud

6
Consumer Fraud

• Fraud against individuals
• Number one consumer fraud Identity Theft

7
Identity Theft

• Involves over 42 of reported frauds
• Use of name, address, SSN, band or credit card
  PINs to commit fraud
• Prevention is the key

8
Identity Theft Conversion

• Purchase of large-ticket items
• False car or real estate loans
• Creation of phone or cell accounts
• Counterfeit checks or debit cards
• Creation of new bank accounts
• False filing of bankruptcy
• False filing of police information
• Creation of new credit card accounts
• Change of mailing address

9
Identity Theft Cycle

• Stage 1 Discovery
• Gain information
• Verify information
• Stage 2 Action
• Document accumulation
• Action cover-up
• Stage 3 Trial
• 1st 3rd dimensions (gas station, store, new
  account)

10
How to Steal Someones Identity

• Obtaining info falsely
• Going through the trash
• Skimming credit cards
• Hacking
• Stealing wallets
• Outright theft from the home
• Stealing mail
• False change of address form
• Shoulder surfing
• Phishing or Pharming

11
How to Protect Yourself

• Guard your mail
• Do not use pre-approved credit cards
• Guard SSN and PINs
• Guard all personal information
• Guard your trash
• Protect your wallet
• Protect and change your passwords
• Protect your home
• Protect your personal computers
• Use the Gramm-Leach-Bliley Act to opt out of
  having your information sold

12
Post Event Activity

• Report event promptly
• Collect evidential matter
• Contact FTC regarding identity theft
• Homeland security implications

13
Other Forms of Consumer Fraud

• Foreign Advance-Fee Scams
• Work at Home Schemes (MLMs)
• Bogus Mystery Shopping Scams
• Telemarketing Scams
• Investment Scams (Ponzi Scams)