Two Forensic Accounting Case Studies

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Two Forensic Accounting Case Studies
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• What do you do when you think an employee is
  embezzling money from your company? Or how does a
  married couple facing divorce divvy up their
  money and assets? Money can be a sensitive
  subject at the best of times, so forensic
  accounting is often the quickest way to resolve a
  financial dispute.
• What is forensic accounting?
• Forensic accounting, also known as investigative
  accounting or consulting, is a specialized form
  of accounting focused on fraud and other
  situations where a forensic audit comes into play.

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• Forensic accounting firms like Culpepper CPA get
  hired to analyze records, look for evidence of
  misconduct, and report on what they found. The
  best forensic accounting firms also provide
  litigation support and forensic accountants will
  sometimes testify in court.
• Financial disputes may be business related or
  personal in nature, and their complexity and
  duration vary widely, kind of like court cases.
  Here are some common examples of situations where
  forensic accounting comes into play
• Securities fraud and insurance claims
• Divorce cases

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• Motor vehicle accidents with personal injury
  claims
• Disputes among shareholders or between business
  partners
• Embezzlement, employee thefts, and other fraud
  investigations inside a company
• Forensic accountants typically dont offer advice
  on what action to take. They instead organize an
  investigation, analyze all of the available
  financial data, share their findings, and educate
  you on the available courses of action. You must
  decide for yourself which course of action is the
  best.

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• Case Study 1 Using Forensic Accounting to
  Prove Embezzlement
• Culpepper CPA has been called in to investigate a
  number of cases where a high-level executive or
  even hourly employee was cooking the books.
• One of the challenges inherent to cases of
  suspected theft, fraud, or embezzlement is
  unearthing clues. A person stealing money tries
  to cover his or her tracks, and the more
  sophisticated the thief, the harder he is to
  catch.
• For example, a local construction company once
  engaged us to investigate a CFO. The owners
  suspected that the CFO had embezzled a
  significant amount of

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• money. The financials just werent adding up. The
  owners noticed some strange transactions, but
  they lacked the objectivity and training
  necessary to connect all the dots.
• We were able to dig back through all the
  financial records, document the many unauthorized
  transactions, and deliver definitive proof to the
  owners. Over the last three or four years, the
  CFO had, in fact, manipulated payroll to give
  himself unapproved bonuses. He also put personal
  expenses on company credit cards and paid
  personal bills with company checks.
• All told, the CFO had embezzled over 700,000!

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• We interviewed the CFO, who became an ex-employee
  soon after. We also worked with our clients
  insurance company to help get a claim filed and
  recover the maximum amount possible for this type
  of embezzlement. When the company later decided
  to press charges against the CFO, we provided
  testimony as an expert witness.
• Case Study 2 Using Forensic Accounting to
  Prove Fraud
• Another one of Culpepper CPAs clients was a
  school system. Several high-level administrators
  suspected that a principal was misusing school
  funds.

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• The principal used school funds to pay 25,000 to
  30,000 worth of tuition for his Masters degree.
  He helped his wife, who was a teacher at the
  school, keep a retired teacher, who was their
  personal friend, on payroll. And he created
  additional pay or salaries for people working at
  before- and after-school programs, even when
  those individuals didnt work all the days for
  which they were paid.
• Some of them even logged Paid Time Off (PTO) on
  the same days for which they received
  after-school pay!
• We were able to investigate these incidents,
  document the various unauthorized expenditures
  and fraudulent payroll, and give the local board
  of education the

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• information and context they needed to terminate
  the principal and file a counter-suit against the
  ex-principal.
• Final Thoughts
• Unfortunately, we live in a world where forensic
  accounting is needed to resolve financial
  disputes.
• Though some people certainly make honest
  mistakes, others know exactly whatthey are doing.
  Being in the right may not be enough to keep you
  out of the courtroom, so it pays to have the
  right financial records and documentation, along
  with expert testimony from a forensic accountant.

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• If we can get you some peace of mind, by all
  means give us a call at [phone].
• Culpepper CPA is a full-service tax, accounting
  business advisory firm based in Knoxville. We are
  also specialists in forensic accounting in
  knoxville. We help our clients to make confident,
  tax-savvy decisions. Our accountants in
  knoxville, TN began their careers in the
  fast-paced culture of global and national firms.
  We now believe in personalized advice and custom
  accounting solutions. If you are looking for CPA
  firms or services like payroll or tax preparation
  or forensic audit in Knoxville,TN contact us
  today.