Forensic audit in accounting with some example

SWENSON Case Studies

  • Restated revenue recognition for all prior years for thousands of domestic and international sales contracts.
  • Restated the purchase accounting for over 12 acquisitions.

A large multi-national SEC registrant in the IT sector perpetrated fraud by improper revenue recognition and purchase price allocation manipulation

Swenson’s forensic team assembled a group of 60 professionals within a 10 day period to recalculate revenue for a five year period. Swenson developed a tailored IT platform to assist in the restatement of the registrant’s quarterly and annual financial statements. Swenson worked closely and coordinated these efforts with a Big 4 firm who ultimately issued the restated financial statements and assisted legal counsel with the identification of fraudulent activities and transactions which assisted with the prosecution and conviction of several senior officers.

  • Chief Financial Officer gave a written confession leading to termination.
  • Assisted the company with the placement of a new Chief Financial Officer.
  • New Internal Controls were implemented.
  • Strict confidentiality maintained throughout the process.

Swenson was engaged by a high ranking government official to investigate the misappropriation of funds from multiple entities over a 3 ½ year period.

The Swenson forensic team analyzed the company’s records and identified all material transactions with related entities. Swenson determined that funds were misappropriated through fictitious/fraudulent payroll activity, altered checks, and debt forgiveness granted to certain customers. Once the team discovered the misappropriation of funds, the employee was interviewed, confessed to the misappropriations and was terminated. Swenson assisted legal counsel in the prosecution/restitution process.

  • Accounting clerk gave a written confession and was then terminated.
  • New accounting department staffing was formed.
  • Our report was used to assist in the restitution process to recover a portion of the misappropriated funds.
  • Newly expanded Internal Controls were implemented.
  • Executive team member terminated based upon our findings.

A large religious organization in California turned to the Swenson forensic team to assist in the assessment of a large misappropriation of cash receipts from the organization over an eighteen month period. Swenson also assisted the organization when it received notification of potential fraud from an internal whistleblower of alleged improprieties by a member of the Executive team.

The Swenson team executed a three phase investigation. Interviews with the whistleblower and offender were performed. A thorough analysis of the organization’s records was performed and the findings were summarized in a formal report. Swenson now provides ongoing monitoring through internal audit services and a newly formed audit committee.

  • Discovered certain records had been altered.
  • Recovered in excess of $100,000 in overbillings by the service provider.
  • Suggested numerous recommendations to strengthen internal controls.
  • Strict confidentiality maintained throughout the process.

A Federally funded non-profit organization in the education industry engaged the Swenson forensic team to perform agreed-upon procedures as required by the Office of the Inspector General. The objective was to determine whether supplemental educational services performed by the non-profit organization were properly delivered, billed, and adequately documented.

The Swenson forensic team reviewed over 1,250 files. Certain procedures were performed as required on each file, monthly invoices, electronic attendance reports, and tutor timecards. Discrepancies were discovered whereby hours per the daily service log did not agree to the tutor timecards.