When cops cuff future white collar crime suspects, chances are evidence will have been brought to light by forensic accountants trained through model curriculum guidelines developed at West Virginia Universitys College of Business and Economics.
The college recently received a $600,000 grant from the federal Office of Science and Technology, National Institute for Justice, in the Department of Justice. With it, the colleges Division of Accounting is forming a group of national experts to create forensic accounting curriculum guidelines. Also, the college will be offering four graduate courses based on actual fraud cases beginning this summer.
Since the high-profile accounting scandals at Enron, Global Crossing and WorldCom, many colleges and universities have developed stand-alone courses to teach forensic accounting, which focuses on detecting illegal financial activities. However, there are no national academic standards for these courses nor does a comprehensive model curriculum exist for forensic accounting.
“Our Division of Accounting will use the grant to assemble a nationally recognized group of forensic experts to develop a model curriculum,”said B&E Dean Jay Coats.”Members of the group will come from accounting firms, law enforcement such as the FBI , the Securities and Exchange Commission and other government agencies.”
The Association of Certified Fraud Examiners estimates that $600 billion was lost to fraud in 2002. Accountants with forensic investigation skills are needed by attorneys and law enforcement agencies at the state, local and federal level, with government agencies such as the Securities and Exchange Commission, IRS and U.S. Office of Inspector General.
In the past, forensic accountants developed investigative skills through on-the-job experience, said Ann Pushkin, chairperson of the Division of Accounting. Today, this isnt enough, especially when new private-sector accounting rules require companies and their auditors to be more aggressive in searching for fraud, she added.
Bonnie Morris is one of the WVU accounting professors who is developing the program.
“The increase in demandfor accountants in general and for forensic accountants in particularmeans that there arent enough people with on-the-job training,”she said.”So, firms and government agencies will have to start recruiting at the entry level. And entry-level accountants who have been exposed to case-based, hands-on courses will be much better prepared than students who have simply read a book about forensic accounting and taken multiple choice tests.”
Gary Stoops is chief of staff at the National White Collar Crime Center near WVU .
“Forensic accounting is hardly new,”Stoops said.”However, through the instability in financial markets recently due to creative accounting and corporate fraud, theres definitely a growing demand across the spectrum in business and government for people with this type of accounting skill.
“The field of forensic accounting began its boom in the late 1980s,”he added.”And more recently, there has been a significant increase in securities litigation and Securities and Exchange Commission investigations, as well as health care and business fraud and intellectual property and computer theft.”
The new WVU courses mean that students will have the opportunity to acquire forensic accounting skills before they graduate and wont require fundamental training when they seek such jobs in the private and public sectors, Stoops said.
WVU is already involved in many aspects of forensic investigation through a program established in collaboration with the FBI in the 1990s.
“With the new forensic accounting program, WVU is adding another area of concentration that is enhancing its reputation as a hub for forensic education and research,”said Max Houck, director of the Universitys Forensic Science Initiative.
Courses being offered this summer are Fraud Investigation, Fraud Data Analysis, Criminology and Legal Issues and Advanced Fraud Investigation.
Fraud Investigation will look at types of fraud, documents, sources of evidence and analysis of fraud schemes. In Fraud Data Analysis, students will use computer-aided data analysis techniques for detecting and investigating fraud cases and the collection and use of digital evidence and data from electronic devices. In Criminology/Legal Issues, they will learn the sociological and psychological theories of criminal behavior, laws, rules of evidence, the rights of persons under investigation, interrogation and interviewing, report writing and ethics related to forensic accounting. Students in Advanced Fraud Investigation will examine major fraud investigations, including presentation of cases in a moot court setting.
These courses will take students in a somewhat different direction from ordinary accounting.
“Forensic accounting and investigation is typically a reconstructive activityreconstructing what took place, given an incomplete set of financial books and records,”said Richard Riley, WVU assistant professor of accounting.”In addition, it usually has some sort of legal connotation. Even if a case never comes to trial, investigation is always pursued as if the work will be presented as evidence at trial.”
For information, call Bob Maust, accounting professor, at 304-293-7842 or Pushkin at 304-293-7845.