24Apr/16

The Forensic Audit

 

Forensic audit-1

Money is missing from the petty cash, large discrepancies are showing up in inventories, a soon to be ex-spouse claims bankruptcy, promised assets from a will are missing. These are all common reasons an investigator requests a forensic audit. Every crime leaves some trace; in financial crimes it usually means a digital trail.

Financial crime continues to grow in the digital realm, while in the real world, violent robbery is down according to the 2013 FBI Robbery report. This is the main factor fueling the increase in the use of financial audits. It is where the accounting profession meets the investigation vocation.

Forensic accounting history runs hundreds of years into the past but has dramatically increased in popularity since the 1970’s according to Kristen Dreyer’s “A History of Forensic Accounting.” A large part of the forensic accountant profession is focused on businesses vulnerable to fraud like banking and insurance. Auditors must be disciplined in the business practices of these unique entities. Searching for evidence of fraud, auditors like all investigators must conduct themselves professionally, with a focus on confidentiality, especially when reputations of individuals are at stake.

The forensic audit can be used to find more than just theft of goods or money. It is essential in other aspects of criminal Investigation, including money laundering, a time-tested effective way of pursuing drug cartels and criminal syndicates. Forensic audits are used in cases of professional negligence were the auditor has to take measure of another professional’s work. The forensic audit is also used in marital and family law, bringing clarity to support payments through lifestyle and asset analysis. Not only is the forensic audit a key aspect in catching fraud and financial crime, they are also increasingly being asked to develop procedures and systems that audit committees can put in place to
deter fraud.

 

Richard Poland

25Jan/16

Transcript Security and Human Error

security lock

It’s hard to open a paper or read any news  article without running into another security breach headline like “Fed’s anger grows over data breach, amid fears that the number affected could rise.” (Washington Post June 28, 2015) or (WIRED Magazine’s June 13, 2015 article) “WHY THE OPM BREACH IS SUCH A SECURITY AND PRIVACY DEBACLE.” Our networks and computers seem to be under constant attack from malicious hackers bent on stealing all they can get their digital tentacles into.
The fact that hackers are always testing, lurking and probing for new ways to get into our systems can make the average user weary of security. The truth is that most of all security breaks are often a direct result of human error.

This past weekend, Woolworths (an Australian grocery chain) accidently emailed a list of 8,000 gift cards, with customer information and redeemable codes, to a list of shoppers who had purchased a discount card from a Groupon sale. Instead of receiving a PDF with an electronic voucher from the grocer, many customers were emailed a master list with information for over $1 million in vouchers as reported by Australian Based Fairfax Media. In 2011, Robin Seggelman, a German computer programmer, made a coding error, really just a typo, that resulted in a backdoor into supposedly secure sites. You have most likely heard of it: “Heartbleed.” It even caused the Canadian Revenue Agency to temporally shut down its website. Joseph Brean National Post

Companies and individuals are going to have to work harder to avoid these errors. Through proper training and simple education, subjects like email phishing and proper password protocols can be explained so that users will be less vulnerable to their own mistakes.

Richard Poland