Accounting, also known as accountancy, is the processing of information about economic entities, such as businesses and corporations. Accounting measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used interchangeably.
Benford's law, also known as the Newcomb–Benford law, the law of anomalous numbers, or the first-digit law, is an observation that in many real-life sets of numerical data, the leading digit is likely to be small. In sets that obey the law, the number 1 appears as the leading significant digit about 30% of the time, while 9 appears as the leading significant digit less than 5% of the time. If the digits were distributed uniformly, they would each occur about 11.1% of the time. Benford's law also makes predictions about the distribution of second digits, third digits, digit combinations, and so on.
In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law or criminal law, or it may cause no loss of money, property, or legal right but still be an element of another civil or criminal wrong. The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements.
Ernst & Young Global Limited, trade name EY, is a multinational professional services partnership. EY is one of the largest professional services networks in the world. Along with Deloitte, KPMG and PwC, it is considered one of the Big Four accounting firms. It primarily provides assurance, tax, information technology services, consulting, and advisory services to its clients.
Certified Public Accountant (CPA) is the title of qualified accountants in numerous countries in the English-speaking world. It is generally equivalent to the title of chartered accountant in other English-speaking countries. In the United States, the CPA is a license to provide accounting services to the public. It is awarded by each of the 50 states for practice in that state. Additionally, all states except Hawaii have passed mobility laws to allow CPAs from other states to practice in their state. State licensing requirements vary, but the minimum standard requirements include passing the Uniform Certified Public Accountant Examination, 150 semester units of college education, and one year of accounting-related experience.
An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon." Auditing also attempts to ensure that the books of accounts are properly maintained by the concern as required by law. Auditors consider the propositions before them, obtain evidence, roll forward prior year working papers, and evaluate the propositions in their auditing report.
A financial audit is conducted to provide an opinion whether "financial statements" are stated in accordance with specified criteria. Normally, the criteria are international accounting standards, although auditors may conduct audits of financial statements prepared using the cash basis or some other basis of accounting appropriate for the organization. In providing an opinion whether financial statements are fairly stated in accordance with accounting standards, the auditor gathers evidence to determine whether the statements contain material errors or other misstatements.
Forensic accounting, forensic accountancy or financial forensics is the specialty practice area of accounting that investigates whether firms engage in financial reporting misconduct, or financial misconduct within the workplace by employees, officers or directors of the organization. Forensic accountants apply a range of skills and methods to determine whether there has been financial misconduct by the firm or its employees.
Computer-assisted audit tool (CAATs) or computer-assisted audit tools and techniques (CAATTs) is a growing field within the IT audit profession. CAATs is the practice of using computers to automate the IT audit processes. CAATs normally include using basic office productivity software such as spreadsheets, word processors and text editing programs and more advanced software packages involving use statistical analysis and business intelligence tools. But also more dedicated specialized software are available.
The Financial Reporting Council (FRC) is an independent regulator in the UK and Ireland based in London Wall in the City of London, responsible for regulating auditors, accountants and actuaries, and setting the UK's Corporate Governance and Stewardship Codes. The FRC seeks to promote transparency and integrity in business by aiming its work at investors and others who rely on company reports, audits and high-quality risk management.
The Institute of Chartered Accountants in Australia was the professional accounting body representing Chartered Accountants in Australia before it merged with the New Zealand Institute of Chartered Accountants to become Chartered Accountants Australia and New Zealand.
The American Accounting Association (AAA) promotes accounting education, research and practice. The Association mission is to further the discipline and profession of accounting through education, research and service.
Forensic accountants are experienced auditors, accountants, and investigators of legal and financial documents that are hired to look into possible suspicions of fraudulent activity within a company; or are hired by a company who may just want to prevent fraudulent activities from occurring. They also provide services in areas such as accounting, antitrust, damages, analysis, valuation, and general consulting. Forensic accountants have also been used in divorces, bankruptcy, insurance claims, personal injury claims, fraudulent claims, construction, royalty audits, and tracking terrorism by investigating financial records. Many forensic accountants work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials.
David G. Friehling is an American accountant who was arrested and charged in March 2009 for his role in the Madoff investment scandal. He subsequently pleaded guilty to rubber-stamping Bernard Madoff's filings with regulators rather than fully reviewing them. His role in covering up Madoff's massive Ponzi scheme makes it the largest accounting fraud in history.
Fraud represents a significant problem for governments and businesses and specialized analysis techniques for discovering fraud using them are required. Some of these methods include knowledge discovery in databases (KDD), data mining, machine learning and statistics. They offer applicable and successful solutions in different areas of electronic fraud crimes.
Dr. David Paul Weber is an American criminalist, and the former Assistant Inspector General for Investigations at the U.S. Securities and Exchange Commission (SEC). He is the Principal Investigator of a $2.6 million grant by the U.S. Department of Health and Human Services, to test various white collar crime interventions concerning elder financial exploitation and high-tech crime. He is a Professor of the Practice in Fraud and Forensic Accounting at the Perdue School of Business, Salisbury University. In the past, Dr. Weber was a whistleblower who reported allegations about foreign espionage against the stock exchanges, and misconduct in the Bernard L. Madoff and R. Allen Stanford Ponzi scheme investigations. In June 2013, the SEC settled with Weber his whistleblower protection and U.S. District Court lawsuits, paying him one of the largest federal employee whistleblower settlements ever. In 2014, In Bed with Wall Street author Larry Doyle named Dr. Weber as one of his "top 5 whistleblowers". On July 30, 2015, Weber was recognized by six United States Senators and one member of the House of Representatives at the First Congressional Celebration of National Whistleblower Appreciation Day. On August 5, 2021, Dr. Weber met with the President, Speaker of the House, and Senators at the signing of H.R. 3325, the awarding of the Congressional Gold Medal for those officers who lost their lives at the Capitol Insurrection, as he represents one of the deceased police officers and his widow. Ultimately, he was successful in having his client Police Officer Jeffrey L. Smith designated as having died in the line of duty by the District of Columbia in March 2022, and in August 2023 by the U.S. Department of Justice. Dr. Weber is now a forensic accounting professor at the Perdue School, Salisbury University. As part of his teaching duties, he is a special investigator for the Maryland State's Attorneys Offices in two adjoining counties, and a Virginia financial crimes state prosecutor in the neighboring Virginia county. He supervises his students who act as intern investigators on financial crime cases.
The history of accounting or accountancy can be traced to ancient civilizations.
Albert J. Meyer was a forensic accountant and investor who is credited with uncovering fraud at the Foundation for New Era Philanthropy, one of the largest ponzi schemes in U.S. history, as well as notable accounting irregularities at several large public companies. Meyer died on February 3, 2022, from lung cancer.
Election forensics are methods used to determine if election results are statistically normal or statistically abnormal, which can indicate electoral fraud. It uses statistical tools to determine if observed election results differ from normally occurring patterns. These tools can be relatively simple, such as looking at the frequency of integers and using 2nd Digit Benford's law, or can be more complex and involve machine learning techniques.
Artificial intelligence is used by many different businesses and organizations. It is widely used in the financial sector, especially by accounting firms, to help detect fraud.
