BA124: Forensic Accounting

Spring 2015

Update 4/23/15:
New notes


TTR 3:00 - 4:15pm; BC 220                   

Fraud is a significant drain on the U.S. economy. A recent study by the Association of Certified Fraud Examiners estimated that fraud costs the economy over $1 trillion per year. Moreover, this same study estimated that only about 11 percent of frauds are discovered through the course of normal audits (as opposed to approximately 19% discovered by accident)--and even more by tips. This course will examine the various frauds that are perpetrated on companies and discuss ways the accountant can uncover these frauds. In addition, the criminal justice system will be reviewed (with an eye to the role of the forensic accountant as an expert witness) and the various litigation-support functions provided to attorneys by accountants will be discussed.

The ethical aspects of these issues will also be discussed during the course of the semester.


  • (WSA): Fraud Examination, Albrecht, 4th Edition (ISBN-13: 978-0-538-47084-1)
  • (S): Financial Shenanigans, Schilit. 3rd Edition (ISBN 978-0-07-170307-9)
  • (A): O'Brien 124 Course Reader--available at: Copy Craft, 341 Lafayette Street, Santa Clara; Tel: 247-4692. Please call first. Please note that the reader will not be available until after the first class session

Before you come to each class, read the material as outlined in the syllabus. Homework problems are to be completed before each class. Students will be expected to present solutions to selected homework assignments in class. While homework will not be routinely collected, it is absolutely necessary that you do your homework. Each chapter uses concepts and techniques learned in previous chapters. If you wish to understand the material better, you cannot afford to ignore the homework.

There will be four or five (4-5) examinations, two or three mid-terms, a take-home FSA exam and  a comprehensive take-home final examination. The group project and the related presentation will also serve as a comprehensive measure of your overall course competency.   Generally speaking, there will be NO make-up examinations. In the event of a rare emergency on the day of the examination, you should notify me as soon as possible. Use all available methods of communication. The final examination and presentation must be completed as scheduled.  On each examination, an adjustment to each student’s raw score will be given based upon the average score of the top 10% of the class.

In class, we stress analysis and application of the concepts that you are expected to learn on your own. While we follow the general flow of the textbooks, we do not simply repeat the text. We emphasize important points, add new information, review homework problems and apply the concepts to real-world situations. Ample opportunities will be given to you in class for asking questions and answering questions raised by others. I expect each of you to be prepared for class.


Grading will be based on
the following scores:
  The following grading distribution
will be approximated:
Exams (4-5), 100 points each 400-500 A range 40% 90%-100%
Individual Project 50 B range 40% 80%-89%
Group Project 100 C range 15% 70%-79%
Group Presentation 50 D range 5% 60%-69%
Total Points 600-700 F Below 60%


Each student will select a type of fraud or defrauded company and prepare an analysis of the situation in a paper not to exceed 5 pages. Use the following tools to meet the minimum requirements of this project: fraud triangle, elements of fraud, symptoms of fraud and the vulnerability chart.  Add any other tools of your choice to enrich the analysis of your selected situation.  Complete the paper with a personal assessment of the fraudulent behavior.  Personal experiences really enhance the value of this project.  The individual project is due on March 17th.

Each team of 5-6 students will select a company of their choice and conduct a risk assessment/fraud investigation of that firm. The results of this analysis will be presented to the class.  This grade will be weighted based upon participation and the evaluation of your teammates.

The accompanying written report should be presented in the form of a formal fraud analysis, and include:

  1. a discussion of how the elements of the fraud triangle indicated a potential high risk situation,
  2. a summary of your investigation including any interviews conducted and/or evidence collected, and
  3. conclusions drawn from your investigation.

More specific information on the reporting requirements of this assignment will be distributed later in the course.

The project will conclude with classroom presentations conducted in the form of an expert witness testimony on May5th and 7th. Your non-team members will serve as opposing counsel and will cross-examine your testimony. Preliminary reports must be available for the opposing counsel on Apr. 9th.

Any violation of academic integrity in any of the exams or assignments (including unauthorized use of internet resources or illegal copying of reading materials) will lead to a course grade of "F".


COURSE OUTLINE AND ASSIGNMENTS (H/W and article assignment dates may be changed as we progress):

Date                      Topic                                     Assignment    

Jan. 22 The Nature of Fraud Read: WSA 1-2;
Select Team Name and Logo
Complete Student Profile
Complete Name Tent
Jan. 27 Why People Commit Fraud Read: WSA 3; S 1
Jan. 29 Fighting Fraud
Introduction to the 13 Shenanigans
Read: WSA 4;
Read: A 1-4;
Feb. 3 Preventing Fraud-I Read: WSA 5
Feb. 5 Preventing Fraud-II
The Symptoms of Fraud
Read: WSA 6
Read: A 5-7
Feb. 10 Review for MT Prep. for MT #1;
Get MT #1 hintsHERE
Feb. 12 Mid-Term #1 (material thru 2/10) Read: WSA 7;
Feb. 17 Shenanigan Update #1 and Catch-up...Article Review
Data Driven Fraud Detection
Read: S 2-6
Feb. 19 Investigating Theft Read: WSA 8;
Get Group Project Notes HERE
Feb. 24 Investigating Concealment Read: WSA 9
Feb. 26 Investigating Conversion Read: WSA 10
Mar. 3 Inquiry Methods & Reporting-Part I Read: WSA 11; S 7-9;
Begin preparation of Group Project
Mar. 5 Financial Statement Fraud
Identify Company for Group Project
Discuss Individual Project
Read: WSA 12; S 6
Mar. 10 Revenue & Inventory Fraud Read: WSA 13; A 8-12; S 10-13
Mar. 12 Liability & Asset Fraud
Shenanigan Update #2
Complete Individual Project
Get FSA exam HERE, due Mar. 19th in class
Watch for the typo on the Balance Sheet!!!
Mar. 17 Enron: Smartest Guys in the Room
Individual Project Due
Read: S 10-13
Mar. 19 Enron: Smartest Guys in the Room
FSA Exam due
Read WSA 14 & 15
Apr. 2 Organizational & Consumer Fraud Read: WSA 16; A 13-16;
Apr. 7 Bankruptcy, Divorce and Tax Fraud Complete Discovery
Apr. 9 "Sopranos-Bust Out"
Discovery DUE electronically to Prof. O'Brien and opposing counsel
Catch-up on Group Project
Prepare for MT #3; get hints HERE
Apr. 14 MT #3 (Material thru 4/9) Read: WSA 17, A 17-21;
Apr. 16 E-Commerce Fraud  
Apr. 21 Shenanigans Update #3 and Catch-up Read: WSA 18;
Apr. 23 Legal Follow-up
Get Take Home Final Exam HERE, Due May 19th in BBC 220 (submission may be made on May 7th, 15th or 19th)
Read: S 14-16; A 22
Get Team Evaluation HERE
Apr. 30 Catch-up and Review Prepare Presentations
May 5 Presentations-Group I Prepare Presentations
Complete Take Home Exam
May 7 Presentations-Group II
Take Home Exam DUE today, May 15th or May 19th


COURSE NOTES: (Initial notes are available for your review. More notes will be added as the semester progresses.)



  • Welcome back!  Please note that our first class starts at 3:00pm on 1/22. We will discuss the material in WSA 1.