Using Teams in Production and Operations Management Essay
Using Teams in Production and Operations Management
1. Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations.
Forensic accounting is science of examining the organizations, people and money and their relationship. In other terms, applying specialized knowledge and investigative skills to collect, analyze, and evaluate a financial situation, then communicate those findings in a courtroom, boardroom, or other venue.
Forensic accountants are experienced auditors, accountants and investigators of legal and financial documents that are hired to look into possible suspicions of fraudulent activity within a company; or are hired by a company who may just want to prevent fraudulent activities from occurring. They also provide services in areas such as accounting, antitrust, damages, analysis, valuation, and general consulting. Forensic accountants have also been used in divorces, bankruptcy, insurance claims, personal injury claims, fraudulent claims, construction, royalty audits, and tracking terrorism by investigating financial records. Many forensic accountants work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials. (Forensic Accountant, 2009). We can say that the forensic accountant is an independent witness and does not advocate for his or her client.
Massive accounting scandals at Enron, WorldCom, and many others, as well as the collapse of one of the “Big Five” accounting firms have increased the public’s awareness of fraud and fraudulent financial reporting. This increased awareness of fraud, along with recent financial catastrophes including the collapse of investment banks and major turmoil on Wall Street has made the need for forensic accountants even greater in recent months (Solnik, 2008).
In the globalizing economy, every organization needs tranquilizing effects of a consultant to refrain execiveness in business life. It is obligatory to benefit from forensic accountant and audit service from opening to closing period of a company. In that case, the characteristics and traits of experts that provide forensic accounting and audit service have importance.
Forensic accountants have to evaluate, analyze, translate, summarize and communicate technical financial information in a clear manner that is supported by facts. They should have an understanding of legal practices. Also, they should possess the skills to recognize substantial evidence beyond just surface evidence when working with a situation
According to survey conducted by Davis&Farrell&Suzanne 60% or more of the forensic accountant ranked being analytical, detailed-oriented and ethical as essential traits and characteristics. All respondent groups agreed that being analytical was the most essential characteristic for the forensic accountant to possess. This finding suggests that, from a marketplace perspective, whether you are a traditional accountant or a forensic accountant, there are at least three traits and characteristics that are shared by and essential to both professions (2009). Today´s cases are so implicated that they require to be approached analytically and systematically.
Complementing the analytical characteristic is the “inquisitive” characteristic and the “persistent” characteristic. These highly ranked traits suggest the need for the forensic accountant to seek out all relevant information for an engagement, as well as be able to process it and solve the problem at hand (Davis&Farrell&Suzanne, 2009). Forensic accounting requires an inquisitive mind, tenacity and attention to detail, excellent communication skills both written and oral, and an ability to deal with a large amount of documentary evidence whilst working to a tight deadline, knowledge of relevant law and experience of court procedures.
2. Describe the role of a forensic accountant within a courtroom environment.
The term “forensic accounting” refers to financial fraud investigation which includes the analysis of accounting records to prove or disprove financial fraud and serving as an expert witness in court to prove or disprove the same. Thus, basically, the forensic accounting is the use of accounting for legal purposes.
A forensic accountant is involved in the investigating and analyzing financial evidence, development computerized application to assist in the analysis and presentation of financial evidence communicating their finding in the firm of reports exhibits and collection of document and assisting in legal proceedings, including testifying in court as all expert witness and preparing visual aids to support trial evidence.
The job of a forensic accountant including in a courtroom environment often includes: • Assessing losses and potential damage awards
• Applying tax law knowledge
• Applying knowledge of financial accounting practices • Research
• Report writing
• Providing courtroom testimony
• Conducting and assisting in external investigations
• Working closely with law enforcement officers and agencies • Working independently
• Auditing internal and external financial documents
• Conducting and assisting with internal investigations (Owojori, A.A, T. O. Asaolu, pg.184, 2009). In conclusion, it can be said that mostly providing courtroom testimony and expert witness are the main roles of a forensic accountant within a courtroom environment. 3. Analyze the legal responsibility a forensic accountant has while providing service to a business.
As an independent expert, there is no duty of loyalty to either you or your client. The forensic accountant may advocate only for his opinion or position and nothing else. (Forensic Accounting Overview, 2011). He uses his accounting, auditing and investigative skills to assist in legal matters. And his duties involve investigating and analyzing financial evidence, producing reports and testifying in court as an expert witness. Legal responsibilities a forensic accountant while providing service to a business are;
• Whistle blowing: Whistle blowing is reporting of frauds or suspected frauds. As an accountant employed to fit into the position of forensic personnel, it is the duty of forensic accountants to always look for signs of fraud and blow whistle to help uncover the fraud.
• Fraud detection, deterrence and prevention: Forensic accountants apply internal control techniques, auditing and information systems. The institution of reasonably sound internal control is the surest way to detect, deter and prevent frauds and financial crimes. Therefore, forensic accountants should endeavor to set up internal control system and monitor it to ensure proper implementation. • Support for investigation: This duty can be cooperating with a lawyer or consulting a company.
4. Research two (2) cases where forensics accountants have provided vital evidence in a case. Summarize the cases and the importance of the forensic accountants’ role during each case.
Case 1: Fraud has been a threat in business since business began. Enron scandal was one of the big threats that business world encountered. It can be said that the Enron scandal helped the birth of the modern forensic accounting. In the Enron case the abilities of forensic accountants were tested, and is still used today as a learning example to forensic accounting students across the nation.
As a result of Enron, hundreds of other companies underwent similar audits. Not only did it help to expose other companies with similar fraudulent accounting practices, it created a series of systems for yearly audits to ensure the safety of stockholders. As such it also widened the field for accountants who specialize in forensic accounting.
Forensic accounting also protects the public interests and financial security by guarding against dramatic stock drops, such as what was seen in the Enron scandal. It also increases public confidence in the stock market, and encourages people to invest in the markets with a greater sense of security.
Though forensic accounting acts as a prevention of tax fraud within businesses such as Enron, it’s not necessarily the solution. The solution is vigilant record keeping and ethics training within businesses. There will always be employees of companies with less than perfect ethical and moral values. However, if those around them are trained in ethical behavior, and the company has plans in place to protect themselves against fraud, forensic accounting will not be necessary. Enron case had a wake-up call effect to track the fraud and contributed to developing forensic accounting acts.
Case-2: In 1997, Sunbeam, a company that manufactures small tools. Sunbeam sold huge amounts of its products to other companies at a discount, but kept the items in warehouses. On paper, the company appeared to have had high sales; however, Sunbeam’s warehouses were full of unsold product. This practice was uncovered by a financial analyst at investment firm Paine Webber, who downgraded the value of Sunbeam’s stock (How Forensic Accounting Works, 2012)
Bill and hold that Sunbeam used isn’t illegal, but Sunbeam’s shareholders felt deceived and filed lawsuits. Sunbeam’s accounting firm, Arthur Andersen performed an audit and reported that Sunbeam’s books were accurate and in accordance with federal guidelines. However, the board was unsatisfied and hired Deloitte & Touche to review Arthur Andersen’s audit. This follow-up uncovered proof that the numbers had been manipulated. The Securities and Exchange Commission investigated Sunbeam, and its CEO, Alfred Dunlap, was fired and forced to pay millions of dollars to settle investment lawsuits. He paid $500,000 in fines and was banned from serving as an officer in a public company.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 20 March 2016
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