Bruce Dubinsky, a partner and director of forensic accounting and dispute analysis at the Bethesda, Md., firm of Klausner Dubinsky + Associates, was brought in by the American Federation of Teachers a few years ago to look into the books and records of the Washington Teachers Union in the District of Columbia. Dubinsky subsequently discovered that as much as $5 million may have been lifted from the local coffers.

"There's some strange bookkeeping taking place," he said.

Dubinsky is one of a new breed of forensic accountants - he isn't interested in performing standard audits, but instead is out trying to find fraud.

"You could say that Klausner Dubinsky is the Sherlock Holmes of the accounting world, and we have been so for over 20 years now."

Deceitful behavior bubbling

The Federal Bureau of Investigation estimates that white collar crime costs the U.S. more than $300 billion annually.

Many of these crimes are difficult to identify, because the perpetrators have concealed their activities through a series of complex transactions. Usually, large volumes of financial information are involved, and the complexity of these investigations can be a strain on a company's resources.

Enter the forensic accountant.

Ruby Sharma, who handles fraud investigation and dispute services at Big Four firm Ernst & Young in New York, pointed out that the collapse of Enron began a chain of events that has led to regulatory authorities extensively tightening their policies, guidelines and regulations, as the need for stronger corporate governance, independence and risk assessment grows.

"This has prompted greater investigation and concern within many organizations' business activities and practices," Sharma said. "From the many findings of fraudulent behavior within these organizations, auditors and forensic accountants can no longer accept financial information at face value. From the bank teller to the CEO of a company, all levels have been guilty of misleading the business environment in which they work. As standards and procedures become more detailed, so too will the investigations, to ensure the correct establishment of these regulations. As long as human nature exists, fraudulent behavior will undoubtedly follow."

She added that, as a result of significant corporate collapses, a growing need has arisen for accountants in specialized investigative areas. She said that E&Y has a team of professionals who are trained as specialists. "They have significant experience in utilizing accounting, auditing and investigative skills to assist in legal matters dealing with fraud and other such financial business disputes," she explained.

In fact, E&Y's forensic accounting team is comprised of 350 practitioners in the U.S. alone, and focuses on strategies to mitigate and manage conflict in bankruptcy disputes, financial and economic damages, fraud and investigations, government contracts and grants, insurance claims, intellectual assets, and legal technology.

Adding to bottom line

Dubinsky noted that this niche accounts for more than two-thirds of his firm's revenue. "We're continuing to see strong demand for fraud investigations. Actually, we have had double-digit growth for the past six years."

• 1
• |
• 2
• |
• 3
• |
• 4
• |
• 5
• |
• 6
• |
• 7
• |
• next