Investigations
Review and analysis of financial statements, accounting records and audit and accounting working papers to support investigations conducted by state boards of accounting and other regulatory bodies.
On behalf of companies and CPA firms, review of accounting records, financial statements and working papers to respond to regulator inquiries or in defense of complaints or litigation as an accounting and auditing expert.
Review of company records to determine the possible amount and causes of employee misappropriation.
Accounting investigations have comprised a large part of my career, both in conjunction with regulatory bodies and on behalf of accountants and auditors. These investigations principally involve misstated financial information and require a thorough review of the financial statements; reports; the working papers of the auditor/accountant; the books and records of the reporting entity and interviews of responsible persons to determine whether there are deviations from professional or ethical standards. At times, it includes review of testimony and expert testimony. The typical results are inaccurate/inadequate financial reporting and disclosure, misinterpretation of professional standards, noncompliance with laws and contractual requirements, fraud, and audits/reviews that were not properly planned and/or conducted.
Currently, I have the privilege of assisting some state boards of accountancy in their investigations into the accuracy of an entity’s financial statements and the adequacy of the audit done on them. At the AICPA I was in the Professional Ethics Division for nineteen years investigating allegations that CPAs did not properly prepare or audit, review or compile financial statements; my staff and I reviewed the work of over 4,500 practitioners and prescribed remedial actions that included education and oversight.
My experience in these investigations includes retirement plans, not-for-profit entities, governments and nonpublic commercial entities (including manufacturers, retailers, service providers, common interest realty associations).
I have also performed investigations of employee embezzlement that usually including determining the weaknesses in the company’s system that failed to detect the fraud and making suggestions to improve controls.
Performing such services has given me a unique understanding about the root causes of financial statement and audit errors and the areas that can go wrong allowing me to be efficient and effective in my investigations and to provide an understanding to those involved how to avoid future problems. It requires a strong knowledge of the applicable professional standards and an understanding of the environmental factors and the circumstances faced by the accountant/auditor.
And, very often it results in the conclusion that the practitioner has properly applied applicable standards.