Category: Forensic Accounting

Spring Break Turns Sour for Investor

In the matter of Division Entertainments, LLC and Wicks Walker v. Spring Breakers LLC and Muse Productions, Inc. et al., Mr. Walker asserts that he was denied a return of his investment, along with an additional profit, because of Defendants’ breach of contract via improper business practices and faulty accounting.  Mr. Walker, a technology entrepreneur …

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Fraud on the Rise

Economic crime is increasingly plaguing U.S. firms according to a recent survey by PWC.  Key findings include: “45% of organizations in the U.S. suffered from some type of fraud in the past two years, more than the global average of 37%. More than half of U.S. organizations that experienced fraud in the last two years reported an …

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Permanent link to this article: http://betweenthenumbers.net/2014/04/fraud-on-the-rise/

Quarter theft stacks up

A New Jersey man recently entered a guilty plea for his ongoing theft of quarters derived from parking meters.  The individual, who had access to the room where the parking meter change was kept, took “handfuls” of change on a regular basis over approximately two years.  At the end of the period, the theft had …

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Internal Audit’s Top Priorities Include Social Media

Protiviti’s 2014 Internal Audit Capabilities and Needs Survey Report queried more than 600 internal audit professionals about the social media risks that threaten their businesses.  The five largest are: Financial loss Interrupted business continuity Loss of intellectual property Loss of employee productivity Viruses and malware However, despite this awareness of the risks, many companies are still not adequately …

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SOX Whistleblower Protection Extend to Certain Private Company Employees

The Supreme Court has held in the case of Lawson v. FMR LLC that the whistleblower protection available under the Sarbanes-Oxley Act of 2002 (“SOX”) properly extends to employees of privately held contractors and subcontractors who perform work for a public company.  Although the case in question was brought by employees of advisors to a …

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PCAOB Quote Regarding Audit Failure Rate Raises Concerns

Recently, the Wall Street Journal reported the shocking headline “One in Three Audits Fail, PCAOB Chief Auditors Says”.  The PCAOB is the Public Company Accounting Oversight Board, so such a statement certainly has the ability to rattle not only the the audit community, but all users of audited financials. Reading the context of the quote …

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Reducing Audit Fees Increases Restatement Risk

In association with general cost cutting measures over recent years, many companies have pressured their vendors to reduce fees.  This downward pressure has extended to the accounting firms hired to provide independent audit opinions, resulting in a significant drop in audit fees.  According to Audit Analytics, audit fees in 2012 were $472 per $1 million …

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Auditing Standards Board Provides Guidance for Reliance on Internal Auditors

The Auditing Standards Board (“ASB”) has issued its Statement on Auditing Standards (SAS) No. 128, “Using the Work of Internal Auditors”.  SAS 128 defines the external auditor’s responsibilities in situations where they are (a) using the work of the internal audit function to obtain audit evidence or (b) using internal auditors to provide direct assistance …

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Recovering Investor Confidence After a Restatement

When a financial restatement is necessary, it is not surprising that investors will take some time to regain trust and give full credit to future earnings announcements.  A recent study, developed through a collaboration of professors from Singapore Management University and Boston College, suggests that the three quarter rebuilding period described in prior research may be …

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DWP Union Chief Avoids Meeting with Auditors

A recent story in the Los Angeles Times describes how DWP Union Chief Brian D’Arcy did not attend a scheduled meeting with auditors trying to investigate the spending of over $40 million in ratepayer money by two nonprofits he co-manages.  The Joint Training Institute and the Joint Safety Institute were established to foster better relations between managers …

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