AYB115 Governance, Fraud and Investigation

An expert witness provides an opinion or factual information on their specialised knowledge of forensic accounting in court proceedings  (Professions AU, 2016) . The expert will show special expertise in forensic accounting and will deliver the findings to be understood by a layman. Thus, they would explain complex or technical issues in a way that everyone would understand.  A good expert witness should deliver their findings and opinions without objectivity or bias, whilst simultaneously proving to the jurors that their interpretation is the right one (Synchronics Group, 2010) . Expert witness must follow the rules set by the Federal Court of Law and APES 215. I strongly disagree with the statement that if the report is structure well – then there is no real need for any other preparation. Whilst having a comprehensive report is essential, understanding and knowing the facts back to front are important when going up against barristers. Preparedness is the underlying

In recent years, with the increase in fraud, bribery and corruption, forensic accountants have become widely sought after people. As the importance of the role increases, the demand for the forensic accountants to be well-trained, unbiased and educated is at high priority. The concern for the training and specialised knowledge for forensic accountants in the expert witness role is further highlighted in APES215 and the Federal Court Rules.   An example of the downfall of an uneducated expert witness was seen in Land Enviro Corp & Ors v HTT Huntley Heritage [2012] NSWSC 177. Two reports from the expert in support of a $170 million damages claim were rejected as they were based upon opinions which had not been proved (UNSW, 2017) . Furthermore, in Makita v Sprowles [2001] NSWCA 305 the expert’s opinion was rejected as they demonstrated inadequate specialised knowledge and failed to provide the facts behind opinions and conclusions (UNSW, 2017).  Due to lack of specialised knowle

Fraud, corruption and bribery control is vital to any business in mitigating risk (THEIIA, 2008).  I disagree with the statement that small-medium entities should ignore such standards like the Australian Standard (AS) 8001-2008. AS 8001-2008 provides a proactive approach for businesses to use in controlling fraud, bribery and corruption. Large business should implement the standard, whilst small-medium business will still benefit greatly from simply choosing relevant parts to assist them in developing their own fraud and risk mitigation program (Standards Australia, 2008). One of my close friend’s old workplace, a local café, fell victim to fraud due to their lack of implementation of a fraud management program. One worker, over the course of several months was able to take large sums of money. This eventually led to the café’s closure and in turn my friend and all her colleagues were out of employment.   Despite being a small entity, this café would have benefited grea

Whilst a good cop/bad cop has reaped good results over the years, of late a more humanitarian approach such as Motivation Interviewing or PEACE is proving to be more successful, particularly for first time fraudsters. Choosing the right technique can make a significant impact to investigating fraud. An example of the negatives of the good cop/ bad cop approach was felt when I went for an interview a couple of years ago at a clothing store. The interviewers took a good cop/bad cop approach to the interview and it made me feel very intimidated. In turn, I was unable to answer questions properly and found myself even lying in different parts due to the intimidation. This is similar to when good cop/ bad cop approach in legal interviews leads to a false confession.  If the interviewer had taken a more humanitarian approach by building relationship of trust and understanding, I would have felt more relaxed and would have most likely been able to properly and truthfully answer the ques

Over the years there have been many comprehensive frameworks that relate to fraud such Differential Association theory and the General Strain theory. Despite the rapidly advancing culture of technology, Cressey’s Fraud Triangle continues to be a pivotal model used in many industries (Allbrecht, 2014). The model explains the three components that lead to fraud, bribery or corruption as pressure, opportunity and rationalisation . An example of these components was seen at my Dad’s old workplace. A few members were feeling mistreated by management and felt they were greatly underpaid for all their hard work and service.  They decided to begin stealing money from the cash registers over a period of time and were later caught and dealt with accordingly. The workers were able to rationalise as they thought they deserved to be paid more for all their hard work. They had the pressure of financial difficulties and the resentment towards management and lastly had the opportunity , mo

Damages are a monetary award that the law can impose for breach of duty or a tort (Tam, 2017) . It is imposed so that the plaintiff would still be in the same position if the original breach had not occurred. My friend, who undertook work experience for a forensic accounting, firm told me of a case he worked on involving an old JB Hi Fi. In this instance, JB Hi Fi had to close down a store because the council had built a bypass that blocked off and hid away the store. His role was to determine the resulting damages. Forensic accountants quantify this financial loss, work out a business valuation and calculate other damages resulting from an injury, to use in court proceedings. They deliver an expert unbiased business valuation report in court for disputes or civil action law suits (Giliberti, 2014) . Calculating the loss of profits is yet another measure of damages vital to the role of financial accountants  (Pfeiffenberger, 2016) . This loss is calculated if the business cont

Strict or vicarious liability is where an employee commits an act or omission in the scope of their employment and imposes the responsibility onto their employer (Neild, 2013) .  The employer will bear the costs and be found liable for the actions of their employee even without the proof of negligence. I can relate to this when I was meant to be looking after my seven year old sister when she drew with permanent marker all over her bedroom wall. Even though my sister was the one who damaged the wall, my parents found me responsible as she was under my care. However, in a corporate setting, vicarious liability allows companies to face agonizing legal battles even though the actions of the employee were not made aware or supported by senior management (Haberman, 2016) . On a regular basis vicarious liability claims against corporate or white collar crime such as fraud, bribery, insider trading and embezzlement, seems to be flashed all across our televisions. The focus is then put o