Fraud Examination Casebook with Documents: A Hands-on Approach

Preface

Overview of the Serial Fraud Cases

(A Family of Fraudsters)

Fraudulent Financial Statements

Check Fraud, Debit Card Fraud, Cash Larceny

Fraudulent Edits/Adjusting Journal Entries to Cash Receipts

Excel Pivot Analyzes and Summarize a Huge Amount of Data

Tracing Excel Pivot Red Flags Back to Source Documents and Documenting the Flow of Money

Case 1: Fraudulent Financial Statements

1-1 Larsen’s Convenience Store: Using Analytical Procedures in Detecting Financial Statement Fraud

1-2 How to Perform a Horizontal, Vertical, and Ratio Analysis

1-3 Exercises – Fraudulent Financial Statements (Larsen Convenience Store)

1-4 Exercise Templates

1-5 Review Questions – Fraudulent Financial Statements (Larsen Convenience Store)

Case 2: Check Fraud, Debit Card Fraud, Cash Larceny

2-1 Anderson Internal Medicine: Preparing a Bank Reconciliation and Spreading /Analyzing Transactions on Monthly Statements from Financial Institutions

2-2 How to Perform a Bank Reconciliation

2-3 How to Read Checks and Decode Debit Card Transactions

2-4 How to Spread and Analyze Check and Debit Card Transactions

2-5 Exercises – Check Fraud, Debit Card Fraud, & Cash Larceny (Anderson Internal Medicine)

2-6 Exercise Templates

2-7 Review Questions – Check Fraud, Debit Card Fraud, & Cash Larceny (Anderson Internal Medicine)

Case 3: Fraudulent Edits/Adjusted Journal Entries

3-1 Anderson Internal Medicine (Edits/AJEs): Vouching from a schedule (e.g., data extraction of edits/adjusting journal entries) to source documents (e.g., deposit slips and bank statements).

3-2 How to Vouch/Trace between a Source Document and an Accounting Ledger, Journal, or Activity Log

3-3 Exercises - Fraudulent Edits (or AJEs) (Anderson Internal Medicine)

3-4 Exercise Template

Case 4: Using Data Analytics: Analyzing and Summarizing Data with Excel Pivot

4-1 Anderson Internal Medicine (Data Analytics): Using Data Analytics – Analyzing and Summarizing Data with Excel Pivot

4-2 How to Use Excel Pivot to Analyze and Summarize Data

4-3 Exercises - Using Data Analytics (Anderson Internal Medicine)

4-5 Review Questions – Using Data Analytics (Anderson Internal Medicine)

Case 5: Tracing Data Analytics Red Flags Back to Source Documents Using Subpoenas

5-1 Anderson Internal Medicine & Larsen Convenience Store (Conspiracy & Loan Fraud): Trace transactions discovered during data analytics back to source documents using subpoenas

5-2 How to Write Wording to Subpoena Documents, Information, and/or Objects

5-3 Exercise - Anderson Internal Medicine & Larsen Convenience Store (Conspiracy & Loan Fraud)

Case 6: Reports, Schedules, and Audio-Visuals

6-1 Writing a Fraud Examination Report

6-2 Formatting Schedules for Inclusion with Reports

6-3 How to Simplify the Complex with Audio-Visuals

Case 7: Documents

7-1 Larsen Convenience Store

Recorded Interview – Gregory Larsen

Authorization for Release of Financial Records

Sworn Statement – Proof of Loss

2013 IRS Individual Tax Returns (Schedules C)

2014 IRS Individual Tax Returns (Schedules C)

2015 IRS Individual Tax Returns (Schedules C)

2014 SBA Personal Financial Statements

2015 SBA Personal Financial Statements

2016 SBA Personal Financial Statements

Transcripts – 2015 Sales & Use Taxes per Form ST-3

Shamrock Groceries 2015 Purchase by Month

Georgia-Tennessee Fuel Partners 2015 Purchase by Month

Marietta Beverage Company 2015 Purchase by Month

Discount Tobacco Supply 2015 Purchase by Month

Jenkins Media Service 2015 Purchase by Month

10-30-15 Physical Inventory

7-2 Anderson Internal Medicine

Bank Reconciliation – April 1, 2016 – Tonya Larsen

Bank Statement – March 2016

Canceled Checks (Front)

Canceled Checks (Back)

Deposit Tickets – March 2016

Cash Receipts Journal – March 2016

Cash Disbursements Journal – March 2016

7-3 Anderson Internal Medicine (Edits/AJEs)

Report of Interview – Jennifer Anderson, MD

Data Extraction 203-Tonya Edits

Deposit tickets – January through March 2016

7-4 Anderson Internal Medicine (Excel Pivot)

Excel spreadsheet – Details of Transactions in Bank of Lawrenceville

– September 2015 through February 2016

7-5 Anderson Internal Medicine and Larsen Convenience (Husband/Wife Bank Fraud Conspiracy)

Report of Interview – John Grayson

Credit Application – Waleska Bank

Waleska Bank Statement for Greg Larsen – December 2015

Front of Official Checks – Loan No. 15-3989

Front of Checks for Account 7011176 (Greg Larsen)

Back of Official Checks – Loan No. 15-3989

Back of Checks for Account 7011176 (Greg Larsen)

Sample U.S. Court Subpoena to Produce Documents, Information, or Objects or to Permit Inspection of Premises in a Civil Action

Sample U.S. Court Subpoena to Produce Documents, Information, or Objects in a Criminal Case

Sample U.S. Court Subpoena to Testify Before a Grand Jury

Sample U.S. Court Subpoena to Testify at a Deposition in a Criminal Case

Sample U.S. Court Subpoena to Testify at a Hearing or Trial in a Criminal Case

About the Authors

About the Website

Index

WILLIAM H. BEECKEN is director of fraud services for Assurance Forensic Accounting, former ATF senior forensic auditor, and has taught fraud examination for eight years at Brenau and Southern Polytechnic State universities.

CLARK A. BEECKEN is an auditor who conducts forensic audits and forensic data analytics. Previously, he was a senior forensic auditor with Georgia Tech, conducting financial investigations and digital forensics.