Forensic Accounting

Code: И17РФРА · 5 ECTS · Accounting and Business Finance

Field of study: EF-RIR: Accounting and Auditing

Course Objectives

After completion of the program students will be able to, by analyzing financial statements, identify areas in which obscuring and falsifying were committed. In addition, they will be able to analyze the internal control systems in order to identify potential risks that are not covered by a system of controls, and which are a threat to achieving company goals.

Learning Outcomes

After passing this subject, students will be able to identify the accounting policies in the company that are not in accordance with generally accepted accounting principles, and which are used for the purpose of obscuring or falsifying of balance sheets; identify complex transactions that are potential risks for falsely presenting consolidated financial statements; master the techniques of detecting frauds in company's business activities and in preparation of the financial statements; determine the specific business events, such as bankruptcy, liquidation, litigations, etc. and their impact on reporting.

Course Content

Introduction to Forensic Accounting; Obscuring and falsifying of balance sheets; Definition of frauds and errors; Forensic investigations and auditing: similarities and differences; The goals of creative accounting; Recognition of early and fictitious revenues; Aggressive capitalization and creative cost reduction; Inadequate recognition of assets and liabilities; Creative presentation of financial statements; Manipulation with the consolidated financial statements; Analysis by the ratio of numbers as a technique to detect fraud in the financial statements; Potential red flags and fraud detection techniques; Internal audit as a second line of defense; Other dimensions of forensic accounting; The report of the forensic accountant.

Teaching Methods

Lectures and exercises within the planned number of classes.

Assessment Methods

Colloquium I (0-20 points); Colloquium II (0-20 points); Final exam (0-50 points); Attendance (2point); Class activities (seminar papers, discussions, case studies) (0-8 points)

Textbooks and Other Materials

Belak, V. (2011). Business Forensics and Forensic Accounting - the Fight Against Fraud. Zagreb: Belak excellens; Golden, T. W.; S. Skalak, S. L.; Clayton, M. M. (2011). A Guide to Forensic Accounting Investigation, 2nd ed. Hoboken, NJ: John Wiley&Sons; Group of Authors. (2013). Business Forensics. Banja Luka: Finrar.