The Factors of a Good Fraud Examiner

Topics: Auditing, Audit, Internal control Pages: 3 (941 words) Published: March 2, 2011
The development of fraud examiner/forensic accounting profession since the 2001 Enron Fraud After the Enron and WorldCom business climate, there came a new US federal law called Sarbanes – Oxley Act. The SOX contains 11 titles that describe specific mandates and requirements for financial reporting. It makes corporate executives more accountable for their actions. Companies invested a tremendous amount of resources, time, and effort in order to comply with the requirements. It clearly improved the internal control environment and its ongoing continuity, but it has its limitations. And after Enron, firms also make effort to prevent fraud like: appointment of a new management team; replacement of its auditing firm; restructuring of its board of directors; appointment of an independent examiner; establishment of an annual training and education program; and commitment to improve its internal controls and accounting systems. The rare skills of a forensic accountant are in much demand, not only for potential prosecution purposes, but also because they are instrumental in developing solid preventative internal controls. “As the FASB struggles to tighten the loopholes in accounting, and Congress and the SEC try to build safeguards for corporate governance, one group of accountants has been quietly helping corporations and investors alike in rebuilding confidence in financial statements. These are the forensic accountants.” The forensic accountant actively looks for fraudulent transactions and misrepresentations. Such an accountant has a major role to play in this new environment, and universities have the responsibility to train future accountants to adequately meet the demands of the business world. This increased interest is because of the struggling stock market and lack of investor confidence which has forced many organizations to take a long, hard look at their financial statements. A sluggish economy with its attendant problems might also be an incentive to...

References: • Six Years of the Sarbanes-Oxley Act: Are We Better Off? By Dodwell, William J: The CPA Journal, August 1 2008
• New Frontiers: Training Forensic Accountants Within The Accounting Program By Vinita Ramaswamy: Journal of College Teaching & Learning, September 2007
• The increasing demand for forensic accountants:
• World: The Thompson Memo In Theory And Practice By Christopher A.Wray and Robert K. Hur
• Before and After Enron: CPAs’ Views on Auditor Independence By Deborah L. Lindberg and Frank D. Beck: The CPA Journal
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