Forensic Paper

1654 Words Feb 16th, 2013 7 Pages
Running head: Forensic accountant 1

Forensic Accountant
Dr. Gina Zaffino
Bus 508, Contemporary Business
11/16/2012

Running head: Forensic Accountant 2
Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations. Although forensic accounting is not a new field, it has become more talked about since cases like Enron came to light. For someone interested in the Forensic Accountant profession they should know that this field can be time consuming, but very rewarding. People who work in this career investigate white collar crimes
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Enron used creative accounting which allowed for them to appear more powerful on paper than it really was. They would make an investment on an asset, and immediately claim the estimated profit on its books, even though no profit had actually been made. If they brought in
Running head: Forensic Accountant 5 less revenue than projected, they would hide the loss by transferring it to Dummy Corporation which was off the books. This allowed for the loss to go unreported and for the company to write off losses without hurting the companies’ bottom line. In 2001 an article was written questioning if Enron was overpriced. The article questioned how Enron could maintain its high stock value. It also questioned how analysts and investors did not know exactly how Enron made its income. While writing the article the reporter came across strange transactions that didn’t add up. While still reporting revenue growth, the company disclosed a $1.2 billion dollar reduction in the value of their shareholders stakes and prompted a inquiry by the Securities and Exchange Commission. After an initial investigation, the inquiry was upgraded to a formal criminal investigation. Forensic Accountants later determined that many of Enron’s recorded assets and profits were inflated, and in some cases, completely fraudulent and nonexistent. Some of the company's debts and losses were recorded in offshore entities, remaining absent from Enron's financial

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