ForensicAccountingTechniquesandStrategies 1. SomeKeyConcepts a. InformationSynthesizingmassiveamountsofinformationefficientlyand effectivelyiscritical b. EvidenceDocumentsandemailsusuallydonottellthewholestory;interviews arecriticaltounderstandingthefullpicture c. AnalysisAnalysisisguidedbyirregulartransactionsorpatterns d. QuestioningMindAveryhighlevelofprofessionalskepticismiscritical e.

FindingtheTruthhalftruthsareusuallymoredangerousthanstraightlies 1

2. InformationPreservationandCollection a. Litigationholdsandpreservation b. Capturingandimagingharddrives,serversandotherelectronicinformation c. Freezingkeyaccountingserversanddatabases d. Desk,officeandcommonareahardcopydocumentcollections e. Processingandhostingofkeyinformation f. DataPrivacyconsiderations

3. UnderstandingStructureandOrganization a. Obtainingdetailedunderstandingofentityandcorporatestructure b. Understandingmanagementhierarchyandreportingstructure c. Identifyingrelatedpartyrelationships d. Identifyingjointventuresorotherbusinessrelationships

4. AnalyzingInformationCollected a. Segmentingthecustodianpopulation b. Useofsearchterms c. Documentsv.Emailsv.Transaction/Accountinginformation d. Linkingdisparateinformationsources e. Validatingthatsuspicioustransactionsactuallywererecorded

5. ReviewingEmailandOtherElectronicCorrespondence a. Focusingonkeyconstituencies b. Searchterms c. Datesandtimesreceived d. Primarysenders/recipientsversuscc/bccsenders/recipients e. Linkagetokeydocumentaryevidence f. Riskofjumpingtounvalidatedconclusions

6. Ledgers,JournalEntry,andTransactionDocumentationReview a. Electronicinformationhighlydesired b. Identificationofkeyledgers c. Summaryledgershelpconfirmwhatwasactuallyrecorded d. Detailedledgersidentifyaccountmovementsandtransactionaldetails e. JournalEntriesrepresentthegrassrootsoftheaccountingprocess f. Identifyproblematicaccounts,transactions,andentries,thenlinkwith documentary/emailsupport g. Relatedpartytransactionreview 6

7. AccountingReviewClosingProcessandSelectedAccounts a. Understandingquarterendandyearendcloseprocesses b. Reviewoflateormanualjournalentries c. Reviewofsubjectiveaccruals,reserves,andotherestimates d. Reviewoflargerevenuetransactions e. Reviewoflargeandevendollaramountitems f. g. Itemsovercertaintransactionapprovalthresholds Itemswithverygeneralornodescriptions

8. ReviewofCashManagementandCashFlowProcesses a. Understandingandreviewingcashmanagementsystemsandprocesses b. Understandingbankaccountstructureandkeyaccounts c. Reviewingdailymovementsofcash d. Grossversusnetcashpresentations

9. AnalyzingBudgets,Internal/ExternalExpectations,IncentiveTriggers,andReported Results a. Understandingthepurposeandvarietyofbudgetdocumentation b. Understandinginternalexpectations c. Understandingexternalexpectations d. UnderstandingIncentiveTriggers e. Comparingbudgets,expectations,andreportedresults f. Linkingdocumentaryevidencetoemailandotherconversationalevidence

10. Interviews a. Accounting b. Financialreporting c. Operations d. Othersupportareas(corpdevelopment,legal,investorrelations); e. Internalaudit f. Thirdparties(auditors,legaladvisors,transactioncounterparties,business partners,vendors) g. Management

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11. ReviewingWorkofAuditors a. InternalAuditors i. reviewofauditreportsandreportstotheboard b. ExternalAuditors i. Keyauditdocumentation ii. Auditplanning iii. Auditfieldwork iv. Auditresults v. Frauddetectionwork vi. NationalOfficeconsultations vii. Proposedandfinaladjustments

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