Fo

ollow
wtheM
Moneyy,Find
dtheFraud
d

WissconsinLawJJournal
ByTracyL.Coen
nen,CPA,CFFF
Foreensicaccountinghasbeenarround
fordecades,buto
onlyinthelastten
ebecomeawareof
yearshavepeople
theprofessiononawidescale.Many
nsic
ofthetechniquesusedbyforen
ountantstoinvvestigatefraud
dand
acco
anaalyzethenumb
bersarethesam
me
todayastheywerredecadesago
o.

mputershavem
madethingseaasier,
Com
asw
wecantrack,sort,andmanip
pulate
dataafaster.While
esoftwaresolu
utions
foranalyzingdataa,managing
money
doccuments,andfollowingthem
arebeingusedininvestigations,,
theyy'renotbeingusedtotheirffull
potential.Thisiso
obviouslyamisssed
portunityforclients.
opp

dFashionedInvvestigations
Old
Theeoldwayofinvvestigatingfrau
ud
theonethatrequiresmanualdaata
mining
anaalysisistriedaandtrue.Exam
sourcedocumentsiscriticaltoffinding
outwhatreallyhaappenedwithtthe
nosubstitutefo
orthe
money.Thereisn
judggment,skepticcism,and
inveestigativeintuiitionofaseaso
oned
foreensicaccountaant.

Theerearetwomaajorproblems,
how
wever,withrelyingsolelyon
trad
ditionalinvestigativemethod
ds.
Firsst,itisincredib
blytimeconsum
ming
moundsof
tossortthroughm
doccuments,cullth
hepaperfor

importantnum
i
mbers,andmannually
compareandr
c
reconciledata..Thereis
onlysomuchw
o
workonepersooncando
andwhenface
a
edwithhundreedsof
bankersboxes
b
fullofdocumeents,an
investigationc
i
caneasilytake several
months.
m

Thesecondpro
T
oblemwithus ingonly
traditionalfore
t
ensicaccountinng
techniquesist
t
thepossibilityoof
overlookingim
o
mportantdataaand
inaccuracyind
i
dataentry.Theemore
documentsrel
d
atedtoan
investigation,t
i
thegreatertheechance
forhumanerro
f
orinexamininggthings.

Thesheervolu
T
umeofdatain cases
causesforensic
c
caccountants to
samplethedat
s
ta.Judgmentccallswill
bemadeabou
b
twhatitemstoo
examine,often
e
nwithadollar figureas
acutoffpoint
a
.Unfortunatel y,
examiningonly
e
ysomeofthe
transactionsle
t
eavesroomforrerror.
Sometimesav
S
verysmalltranssaction
canofferahin
c
taboutafraudd,and
thereisalways
t
sariskthataddetailwill
bemissedwhe
b
ensampling.

Whenimporta
W
antdocumentssand
numbersareis
n
solated,thefo rensic
accountantsof
a
ftenengagein amanual
processofente
p
eringthemint o
software.The
s
softwarecanrrange
frombasicdat
f
abasesand

spreadsheeetstospecialized
investigativvesoftware.Unfortunately,
manualdattaentryleavessroomfor
errorsthatcanimpacttheresultsof
theinvestiggation.

TraccyCoenen,CPA,,CFFis
presidentofSequen
nceInc.,
aforensicaccountin
ngfirm
with
hofficesinMilw
waukee
andChicago.Sheeisa
nized
naationallyrecogn
eexpertonfraudaand
financialinvestigattions.

InvestigativveInnovationss
Forensicacccountantsarenotquickto
acceptchan
nge.Theyrelyonthe
techniquessandmethodsthey'vebeen
usingforyeearsandeyein
nnovations
suspiciouslyy.Newsoftwarethatcan
radicallych
hangeandimprove
investigatio
onsisnotbeinggwarmly
embracedyyet.

Thereareaafewverypopularsoftware
packagesth
hathelpfraudinvestigators
manageandanalyzedataa.Theywork

20111SequenceInc..Allrightsreservved.

4.727.2361C hicago312.498..3661www.ssequenceinc.com
m
SequenceInc.ForensicAccountingMilwaukee414

FollowtheM
Money,Fin
ndtheFrau
ud

her
well,buttheirpurrposesarerath
limiited.Whileallofthesoftwarecan
anaalyzedatainmanydifferentw
ways,
mossttimestheso
oftwarehaslim
mited
functionalitywhenitcomestoh
hard
piesofdocume
ents.Thenumb
bers
cop
from
mthosepapersneedtogetinto
thesoftware,and
dmuchofthatmust
donemanuallyy.
bed

Advvancedsoftwarreisavailable,
how
wever,whiche
effectivelyhand
dles
anyydocumentatio
onconnectedttoa
frau
udinvestigation.Itgoesbeyo
onda
typiicalattemptattscanning
doccumentsandhopingthecomputer
reco
ognizesthenumbersandlettters
corrrectly.Nextge
eneration
inveestigativesoftw
warerecognize
esdata
inm
manydifferentformats,putsthe
dataaintoadatabaase,andrapidly
reco
oncilesallthenumbers.

he
Theedataisthenaanalyzedandth
softtwaremapstheflowoffundss,
searchesfortranssactionpattern
ns,

createscharts
c
andgraphs,crreates
standardandc
s
customizedrepports,and
muchmore.Th
m
hedatainstanttly
becomesmore
b
evaluableand usable
forthefraudin
f
nvestigator,whhocan
thendigdeepe
t
erintothetrannsactions
andtheflowo
a
ofmoney.Thessoftware
issovaluablen
i
notonlybecauuseofits
accuracy,butb
a
becauseitcan analyze
100percentoffthetransactioons.

Suchinnovatio
S
onmightsounddtoo
goodtobetru
g
e,butitisnot..
Unfortunately,
U
,thistypeofsooftwareis
notbeingwide
n
elyusedbyfinaancial
investigatorsfo
i
oranumbero freasons.
Onefactorist
O
hehighcostoffthe
softwareandt
s
thedifficultyinntegrating
itintoatraditi
i
onalaccountinngfirm.
Traditionalme
T
ethodsofbillinggfor
fraudinvestiga
f
ationservicesddon't
reallyworkwit
r
thatoolsuchaasthis
software.Fore
s
ensicaccountanntsare
alsoslowtoad
a
dapttheirinvesstigations
toincorporate
t
newsoftwareeand
methods.
m

HiretheRigghtInvestigato
or
Ultimately,thegoalofaffraud
onisadetermiinationof
investigatio
howthefraaudoccurred,w
whodidit,
howitwasconcealed,an
ndhowmuch
orensic
moneyhasbeenlost.Afo
accountanttusingcuttingedge
softwarecaanfindthoseaanswers
faster,morreaccurately,aandwith
greatereffiiciency.Theinvvestigation
willbemorrethorough,yeetwilltake
muchlessttimethanitwo
ouldwithout
thesoftwarre.

osensetobessatisfiedwith
Itmakesno
onlytraditionalfinancialinvestigative
techniquesswhentherearestateof
theartsofttwareoptionstoassistthe
forensicacccountant.Ofcourse,
makinguseeofsuchsoftw
warerequires
acompeten
ntinvestigatorrwhonot
onlyknowsshowtouseth
hesoftware,
butalsoknowshowtofu
urther
investigateanyissuethattmayarise.

20011SequenceIn
nc.Allrightsreseerved.

SequenceInc.ForensicAccountingMilwaukee414
4.727.2361C hicago312.498..3661www.ssequenceinc.com
m