Exam 2 PowerPoints

Chapter 6 To prove unreported or fraudulently obtained income you can use either direct or indirect methods. Direct methods (or transactional methods) involve probing missing income by pointing to specific items of income that do not appear on a tax return. Typically, conventional auditing methods are used to locate unreported income under a direct method approach. Indirect methods, on the other hand, use economic reality and financial status techniques in which the taxpayer’s finances are reconstructed through circumstantial evidence. These methods may be used independently or together to reconstruct the income of a fraudster. Chapter 10 In a legal setting a plaintiff must show damages caused by the defendant. In a business setting, the prominent form of damages is commercial damages; this type of damages typically relate to either lost profits or reduction in value of a business. In some cases there may be both, but care must be taken to avoid an “overlapping” of such damages. The damages are to be paid to make up for some harm on the defendant and experts are typically called in to provide the jury and the court with an estimation of the damages. The forensic accountant’s role varies, but it typically involves a calculation of damages. Chapter 12 Cases involving wrongful death, wrongful discharge, complete or partial disabilities, and other similar situations that take in the economic value of a person, require the use of special economic concepts. Characteristics of economic damages for a person’s life include analysis of a person’s work life, educational background, gender and expected time in the work force. Chapter 15 Cybercrimes varies within each state and within different government jurisdictions. The Internet has not changed the basic manner of conducting a fraud, but it has made it easier to rapidly reach a larger target audience for conducting financial fraud. "FBI" Email The Great Cyberheist One night in July 2003, a little before midnight, a plainclothes N.Y.P.D. detective, investigating a series of car thefts in upper Manhattan, followed a suspicious-looking young man with long, stringy hair and a nose ring into the A.T.M. lobby of a bank. Pretending to use one of the machines, the detective watched as the man pulled a debit card from his pocket and withdrew hundreds of dollars in cash. Then he pulled out another card and did the same thing. Then another, and another. The guy wasn’t stealing cars, but the detective figured he was stealing something. Chapter 16 In contrast to traditional crimes, cybercrimes are relatively new and create the loss of intangible property. Chapter 17 All forensic accountants should be able to understand the basic principles involved in a valuation. Data Driven Fraud Detection Data driven fraud detection may take many forms. These are just a few examples of how one might go about analyzing data to detect fraud. Chapter 10 - 8th Ed. When harm comes to one person or party who suffers an economic loss as a result, there are financial considerations. If the loss is sustained from the harmful act of another, there may be damages. In a legal setting, the person harmed (plaintiff) and the person who harmed the plaintiff (defendant) may not agree as to the facts surrounding the harm and the damages. Often experts are called in to resolve the issues and present them in court. The forensic accountant role in such disputes can vary from case to case, but it is often concerned with the calculation of damages. Commercial damages may relate to either loss of profits or the reduction in value of a business entity. In rare cases, there may be both lost profits and reduction in business value. Chapter 12 8th Ed. Cases involving wrongful death, wrongful discharge, complete or partial disabilities, and other similar situations that take into account the economic value of persons, require the use of economic concepts that have not been covered yet. This chapter will address some of those additional issues that are useful in calculating economic damages in other types of dispute situations. Chapter 15 8th Ed. This chapter deals with identifying cybercrimes, developing a basic understanding of how such crimes can occur over the Internet, and trying to find a way to deal with these criminal activities. Cybercrimes: An Introduction For the banking and finance, the top threat has been financial fraud and ATM theft; for government it is alternation of files and unauthorized access; for healthcare it is the shutdown of email, corporate networks, and the exposure of private information; for telecoms it is denial of access to email and other systems; and for insurance companies it is financial losses that occur from restoration after a cyberattack. Cyber Crime - FBI The FBI is the lead federal agency for investigating cyber attacks by criminals, overseas adversaries, and terrorists. The threat is incredibly serious—and growing. Cyber intrusions are becoming more commonplace, more dangerous, and more sophisticated. Our nation’s critical infrastructure, including both private and public sector networks, are targeted by adversaries. American companies are targeted for trade secrets and other sensitive corporate data, and universities for their cutting-edge research and development. Citizens are targeted by fraudsters and identity thieves, and children are targeted by online predators. Just as the FBI transformed itself to better address the terrorist threat after the 9/11 attacks, it is undertaking a similar transformation to address the pervasive and evolving cyber threat. This means enhancing the Cyber Division’s investigative capacity to sharpen its focus on intrusions into government and private computer networks.