A metamorphosis of the traditional accountant : an insight into forensic accounting services in Australia

The aim of the study is to identify the latest trends in accounting forensic work in Australia by examining how accounting firms that specialise in forensic services meet the needs of their clients, and to inform universities on the appropriate curricula to ensure the knowledge and skills of future graduates meet industry expectations.

Regulation, compliance and the Australian forensic accounting profession

Legacies of the Global Financial Crisis and major domestic corporate collapses – such as HIH Insurance Pty Ltd and One.Tel Ltd (telecommunications) – have significantly changed Australia‟s financial regulatory landscape. Legal requirements for auditors have attracted particular attention as have practice standards more broadly around disclosure and conflict of interest. Conversely, although successful detection and prosecution of breaches may rest in significant part on forensic accounting activities, Australia‟s practitioners in this field have no minimum training or qualifications standards other than the baseline requirements mandated by the country‟s three professional accounting bodies. For those unaffiliated with these organizations, no professional oversight exists. In Australia, growth in the forensic accounting industry has been in direct response to public demand for expertise in a broad range of fraud, forensic and business analytics areas in order to improve the corporate governance practices of Australian organizations. During the 1990s, Australian forensic accounting firms expanded and diversified into a number of different areas going well beyond just the examination of financial documents and involvement in financial litigation disputes. “Big 4” accounting firms such as PriceWaterhouseCoopers, KPMG, Deloitte and Ernst and Young formed independent forensic accounting or forensic services units; a number of mid-tier and „boutique‟ forensic accounting firms similarly expanded into forensic investigative, analytical and advisory services. By 2008, 800 forensic accountants were registered with the country‟s largest specialist forensic accounting group, the Forensic Accounting Special Interest Group (FASIG) of the ICAA1. Currently, obtaining more precise figures on numbers of forensic accounting practitioners is problematic: professional accounting bodies either do not keep a register or have ceased registering their forensic accounting members; lack of formal recognition, admission or certification processes complicate identification of candidates; and diversity of the skills sets the industry requires has meant the influx of non-accounting based specialists.

Forensic accounting and Benford's law

An article [1] in the Journal of Forensic Accounting reviewed the background and development of forensic accounting using Benford’s Law (BL)—an interesting property in natural occurring numbers that can help identify fraudulent data in corporate financial records. The field of forensic accounting, and this law in particular, are relevant in light of several recent events that required the identification of false or otherwise misrepresented information in corporate financial statements. Such information was used or intended to be used to fraudulently misappropriate company funds, cover up illegal transactions, or evade taxation. In this article, we comment on forensic accounting and BL from a signal processing (SP) perspective.

Cloud computing adoption in Australia : the benefits, risks and implications for accounting

The purpose of this paper is to empirically examine the state of cloud computing adoption in Australia. I specifically focus on the drivers, risks, and benefits of cloud computing from the perspective of IT experts and forensic accountants. I use thematic analysis of interview data to answer the research questions of the study. The findings suggest that cloud computing is increasingly gaining foothold in many sectors due to its advantages such as flexibility and the speed of deployment. However, security remains an issue and therefore its adoption is likely to be selective and phased. Of particular concern are the involvement of third parties and foreign jurisdictions, which in the event of damage may complicate litigation and forensic investigations. This is one of the first empirical studies that reports on cloud computing adoption and experiences in Australia.

Perceptions on the causes of individual and fraudulent co-offending: Views of forensic accountants

Individual and/or co-offenders fraudulent activities can have a devastating effect on a company’s reputation and credibility. Enron, Xerox, WorldCom, HIH Insurance and One.Tel are examples where stakeholders incurred substantial financial losses as a result of fraud and led to a loss of confidence in corporate dealings by the public in general. There are numerous theoretical approaches that attempt to explain how and why fraudulent acts occur, drawing on the fields of sociology, organisational, management and economic literature, but there is limited empirical evidence published in accounting literature. This qualitative inductive study analyses perceptions and experiences of forensic accountants to gain insights into individual fraud and co-offending in order to determine whether the conceptual framework developed from literature accurately depicts the causes of fraud committed by individuals and groups in the twenty-first century. Findings from the study both support and extend the conceptual framework, demonstrating that strain and anomie can result in fraud, that deviant sub-groups recruit and coerce members by providing relief from strain, and that inadequate corporate governance mechanisms both contribute to fraud occurring, and provide the opportunity for fraudulent activities to be executed and often remain undetected. Additional factors emerging from this study (the ‘technoconomy’, addiction and IT measures) were also identified as contributors to fraud, particularly relevant to the twenty-first century, and consequently, a refined conceptual framework is presented in the discussion and conclusion to the paper.

Identity, addressing, authenticity and audit requirements for trust in ERP, analytics and big/open data in a “Cloud” computing environment : a review and proposal

Enterprises, both public and private, have rapidly commenced using the benefits of enterprise resource planning (ERP) combined with business analytics and “open data sets” which are often outside the control of the enterprise to gain further efficiencies, build new service operations and increase business activity. In many cases, these business activities are based around relevant software systems hosted in a “cloud computing” environment. “Garbage in, garbage out”, or “GIGO”, is a term long used to describe problems in unqualified dependency on information systems, dating from the 1960s. However, a more pertinent variation arose sometime later, namely “garbage in, gospel out” signifying that with large scale information systems, such as ERP and usage of open datasets in a cloud environment, the ability to verify the authenticity of those data sets used may be almost impossible, resulting in dependence upon questionable results. Illicit data set “impersonation” becomes a reality. At the same time the ability to audit such results may be an important requirement, particularly in the public sector. This paper discusses the need for enhancement of identity, reliability, authenticity and audit services, including naming and addressing services, in this emerging environment and analyses some current technologies that are offered and which may be appropriate. However, severe limitations to addressing these requirements have been identified and the paper proposes further research work in the area.

External auditors’ perceptions of cloud computing adoption in Australia

Adopting a multi-theoretical approach, I examine external auditors’ perceptions of the reasons why organizations do or do not adopt cloud computing. I interview forensic accountants and IT experts about the adoption, acceptance, institutional motives, and risks of cloud computing. Although the medium to large accounting firms where the external auditors worked almost exclusively used private clouds, both private and public cloud services were gaining a foothold among many of their clients. Despite the advantages of cloud computing, data confidentiality and the involvement of foreign jurisdictions remain a concern, particularly if the data are moved outside Australia. Additionally, some organizations seem to understand neither the technology itself nor their own requirements, which may lead to poorly negotiated contracts and service agreements. To minimize the risks associated with cloud computing, many organizations turn to hybrid solutions or private clouds that include national or dedicated data centers. To the best of my knowledge, this is the first empirical study that reports on cloud computing adoption from the perspectives of external auditors.

Proposta metodológica de perícia contábil para o crime de apropriação indébita previdenciária

No decorrer dos últimos anos vêm ocorrendo uma demanda crescente da utilização de serviços periciais nos mais diversos campos. No campo contábil, especificamente no contexto dos crimes previdenciários, a gama de serviços periciais contábeis prestados às lides forenses aumenta a cada dia que passa. Este estudo trata da perícia contábil como meio de prova para materialização do crime de apropriação indébita previdenciária. O desenvolvimento do tema foi efetuado a partir da pesquisa efetuada por Oliveira (2012), que comprovou a relação existente entre tipo penal e a prova pericial contábil, bem como de interpretações da legislação pertinente, no caso, a Constituição da República Federativa do Brasil, Código Penal, Código do Processo Penal e Normas Brasileiras de Contabilidade aplicáveis à perícia. Esta dissertação teve por objetivo a proposição de metodologia para realização de exames periciais que visam a comprovação do cometimento do crime de apropriação indébita previdenciária. A pesquisa empírica foi realizada num total de 79 laudos contábeis emitidos pela criminalística da Polícia Federal no período de junho de 2006 a junho de 2011, envolvendo os exames periciais sobre o crime de apropriação indébita previdenciária, para verificar a natureza das provas utilizadas nestes exames, e, por conseguinte, reunir o conjunto probatório utilizado. Como resultado da pesquisa realizada, foi apresentada uma metodologia para realização de exames periciais contendo o conjunto probatório considerado essencial para a materialização do crime de apropriação indébita previdenciária.