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                              Course syllabus

Course number:      ACCT 461.01

Course title:    Fraud Examination

Quarter:        Spring, 2010

Instructor:     Robert Holtfreter  PH.D, CFE (Dr. H).

Office:         Shaw/Smyser 313

Office hours:   M & W 11:30 A.M.to 12:30 P.M. & 3:00 P.M. to 3:15 P. M.

Office phone:  509-963-2144     

Home phone:    509-965-0369 (Yakima)

E-Mail address - office: holtfret@cwu.edu

E-mail address – home: doctorh@q.com

Class meetings: M &W 5:40 P.M. to 7:50 P.M.in Shaw 111.

 Web address: Http://www.cwu.edu/~holtfret

General introduction:

Welcome to ACCT 461-Fraud Examination! Here at CWU we are very excited because we are the only university in the State of Washington that offers this course. Prior to 2003 there were only about twenty to thirty universities in the U.S. that offered a Fraud Examination course whereas today close to 300 universities in the U.S. offer it as well as many foreign universities.  It will provide you with the professional skills necessary to detect, investigate, and prevent occupational fraud and prepare you for most of the Certified Fraud Examination. The technology, interviewing, document examination, public records and the other tools you study in this course should be of special interest to accountants, auditors, fraud investigators, loss prevention specialists, attorneys, educators, criminologists, or business owners/managers. Regardless of the career you select, you will be a better professional after you successfully complete this course.

Assuming you interested in becoming a Certified Fraud Examiner (CFE), this course will help to prepare you to pass the CFE exam. Although the book does cover most everything on the exam, it would be wise to purchase the Association of Certified Fraud Examiner’s (ACFE) self-study materials after you complete the course or after you graduate. Most employers will pay for the ACFE material. The ACFE guarantees that, if you use their material in the manner proposed, you will pass the exam on the first try. You can take the exam after you graduate but you will not get the official certification until you met the practice requirements. 

Purpose:

The purpose of this course is to: (1) educate you about both the pervasiveness of and the causes of occupational fraud,  (2) explore in detail methods of fraud detection, investigation, and prevention, and (3) increase your ability to detect material financial statement fraud. Additionally, the course has the broader objective of contributing to the professional development of students, including increasing competencies in written and oral communication, professional demeanor, problem-solving/decision making, strategic/critical thinking, interaction and leadership skills. The American Institute of Certified Public Accountants is currently promoting all of these skills as part of their Core Competency Framework for entry into the accounting profession. 

Teaching method:

The class is structured with the use of a combination of lectures and active learning through the use of student learning teams.

Description of Course (adapted):

Fraud examination will cover the principles and methodology of fraud detection and deterrence for occupational fraud. The course covers such topics as skimming, cash larceny, check tampering, register disbursement schemes, billing schemes, payroll and expense reimbursement schemes, non-cash misappropriation, corruption, accounting principles and fraud, fraudulent financial statements, and interviewing techniques.

Course Objectives (in general*):

By the end of the course the student should be able to understand:

How and why occupational fraud is committed.

How fraudulent conduct may be deterred.

How to investigate and resolve allegations of fraud.

* More specific objectives are stated on the first page of each chapter.

 

 

Text and other materials:

·        Principles of Fraud Examination by Joseph T. Wells; 2nd edition; John Wiley & sons.

·        Videos from the Association of Certified Fraud Examiners (ACFE.

·        KPMG Fraud Survey – maybe if the latest one is available.

Student Responsibilities and Requirements:

 It is assumed that when you register for this course, you are making a commitment to devote the time necessary to meet the course requirements. It is expected that every student will fulfill every requirement of the course. Although course attendance is not required, students are highly encouraged to attend class and take part in class activities.  There is a very high correlation between class attendance and grades.  You are expected to have your homework done when you come to class. You also are highly encouraged to ask questions in class

Homework:

 I will probably assign all of the review questions and discussion issues for each chapter. Working the questions is crucial because it tests your knowledge of the key concepts in the reading material and helps to prepare you for the tests. I would suggest reading the chapters a couple of times before attempting to do the homework.  I may also have you do a few Internet assignments. These are extremely important because you learn where to find information about the fraud area.  Specific daily assignments will be posted on the homework link, which I’ll post and update on a weekly basis. It is crucial that you check the homework link during the week for changes in homework assignments and other information.

Upgrading of teaching to enhance student learning:

It is common knowledge that college graduates will work on teams or in groups when employed in the workplace. To help develop the professional demeanor, problem solving/decision making, interaction, leadership, strategic/critical thinking and communication skills necessary to work on teams and to enhance performance on exams, student-learning teams will be used in class. To gain an appreciation of the positive outcomes of working in student-learning teams, please go to my web site and read the articles that I have recently published in this area.

Testing and grading policies:

 For testing purposes, there will be three regular exams and an optional comprehensive exam. The three regular exams are required whereas the comprehensive exam is optional but will count 100 points if you take it. To qualify to take the final you must demonstrate that there is a possibility that you have a chance to improve your overall grade. For example, if you need 100 points or less on the final to improve your overall grade, then a possibility exists and you qualify to take it. On the other hand, if you need more than 100 points on the final to improve your overall grade, which is impossible, you will not qualify to take it. All exams count 100 points. You may take an exam on a day before it is given in class but not after. There are no make-up exams and if you miss one exam, the optional comprehensive final exam will be required and score on this exam will be used as the score for the exam you missed.

Test # 1 covers chapters 1-4; test # 2 covers chapters 5-8; test # 3 covers chapters 9-13; there will be no test for chapter 14, only a quiz.

 No Points will be given for attendance or completion of homework. Extra credit will not be granted for any reason.

Course Philosophy.

Students must complete both the reading and written assignments that are due each day. An understanding of the assignments is necessary to effectively participate in classroom activities and learn from the Instructional Videos/Exercises scheduled for that day. The role of the professor is to disseminate facts and also facilitate your mastery of knowledge and skills related to forensic accounting. I will work to provide an environment that promotes active learning and motivates you to strive for your best.  I am generally available to help students during my office hours and other hours by appointment. I am happy to respond to questions via e-mail or telephone. Please contact me about any problems you are having with assignments, grading, projects, etc. What you get out of this course is dependent on the effort you put into it. 

Written and Oral Assignments – 100 points

       As part of the course requirements, I require that students write a research paper on a fraud topic that I normally assign. Drawing on my strengths as a researcher and member of the editorial boards of our three top academic and practitioner journals, I’ll teach you how to conduct a non-empirical research project that is appropriate for a presentation to any audience. 

       

      I have decided to get some or all of my students in the Fraud Examination course involved in service work staring with the fall 2009 quarter. I will assign two students to a team and their role will be to either (1) update some of the recent articles that I have published in the Identity Theft and debit/credit fraud areas and produce power point presentations or (2) conduct a research project in another area of fraud and produce a power point presentation. After I edit each power point presentation, I will then require the members of each team to make a presentation to the class. Then, I will select the best (hopefully all) presentations and, hopefully, get volunteers to make presentations at various business and non-for-profit organizations in Yakima and Kittitas counties. I will have more details about this assignment later.  

         

Grade Determination:

Grades are based on the following preset standards; i.e. a curve will not be used.

            A   = 91 – 100            D- = 65

            A- = 90                    F   = 0 - 64

            B+ = 88 - 89

            B   = 83 - 87 

            B- = 80 - 82 

            C+ = 78 - 79

            C   = 73 - 77

            C- = 70 - 72

            D+ = 69

            D   = 66 – 68

Class policies for taking tests and for written assignments

Memory calculators, electronic dictionaries, cell phones, palms or any other electronic devices are not allowed to be used during the taking of an exam. Our department has a policy that only Texas Instruments “Math Mate” calculators or a similar non-memory calculator may be used. The only items allowable on the table are the test, non-memory calculator, and pencil/pen. No hats or caps can be worn. To get credit for an answer on a test, all relevant calculations must be provided. In other words, if you show the correct answer by guessing but do not provide the relevant calculations to support the answer, you will not get any credit or points. On the other hand, if you provide all the relevant calculations to support your derived answer but provide the wrong answer because of a math error, you will be given full credit for the work. I grade the work, not the answer, where calculations are required.

 Cheating of any sort, including the use of crib sheets, etc., will not be allowed.  The penalty for such behavior will be an "F" for the course. After the tests are scored, we will go over them in class. They will be then collected and kept in my office. A score of zero will be recorded for any test that is not returned during the class session in which it was reviewed. 

Other Important Information:

The class begins on Wednesday March 31.

Change of schedule period is March 30 – April 5. 

Uncontested withdrawal deadline is Friday May 14.  

No class on Monday May 31 – Memorial Day.

Hardship withdrawal petition deadline is Friday June 4.

Last day of instruction for our class is Weds. June 2.

Student study/faculty development day is Monday June 7.

Optional Final exam date is TBA. 

 

Caveat:  If errors are found in scoring any of the tests, written assignments or in assigning the final grade, I have the right to change a student’s scores or assigned grade at any time during the course or after the final grade has been released to the registrar’s office.

 

In-class Videos: The ACFE has provided me with a number of excellent videos that are recommended for the course. The video titles along with the chapters they are tentatively assigned to follow:

The Cooking the Books: What Every Accountant Should Know About Fraud video corresponds with the following chapters:

Chapter 11 – Accounting Principles and Fraud
Chapter 12 – Fraudulent Financial Statement Schemes

The Corporate Con: Internal Fraud and the Auditor video corresponds with the following chapters: This video illustrates common financial frauds committed by employees and managers within business and government. The video features interviews with criminals--many were taped in prison.

Chapter 3 – Cash Larceny
Chapter 6 – Payroll Schemes
Chapter 7 – Expense Reimbursement Schemes
Chapter 10 – Corruption

The Finding the Truth: Effective Techniques for Interview and Communication video corresponds with the following chapter:

Chapter 13 – Interviewing Witnesses

The How to Detect and Prevent Financial Statement Fraud video corresponds with the following chapters:

Chapter 11 – Accounting Principles and Fraud
Chapter 12 – Fraudulent Financial Statement Schemes

The Other People's Money: The Basics of Asset Misappropriation video corresponds with the following chapters:

Chapter 2 – Skimming
Chapter 3 – Cash Larceny
Chapter 4 – Billing Schemes
Chapter 5 – Check Tampering
Chapter 6 – Payroll Schemes
Chapter 7 – Expense Reimbursement Schemes
Chapter 8 – Register Disbursement Schemes
Chapter 9 – Non-Cash Assets
Additional videos. Although these videos are not covered specifically in the textbook, they may be used as additional resources, if time permits.

·        Making Crime Pay: How to Locate Hidden Assets

·        The Fraud Trial: This video by the ACFE examines the legal process involved in trying someone suspected of fraud. The video contains actual footage of the trial of an assistant police chief suspected of embezzling money from the police department.

Speakers: We may have an outside guest speaker or two that will talk about various issues in fraud. More on this later.

Opportunities in the fraud/forensic accounting area:

 Fraud and forensic accounting are rapidly growing areas concerned with the detection and prevention of fraud and white-collar crime. Robert G. Roche, a retired chief of the IRS Criminal Investigation Division, provides this description of a forensic accountant:

Someone who can look behind the facade--not accept the records at their value--someone who has a suspicious mind that the documents he or she is looking at may not be what they purport to be and someone who has the expertise to go out and conduct very detailed interviews of individuals to develop the truth, especially if some are presumed to be lying.

Recently, U.S. News and World Report listed forensic accounting as one of the “20 hot job tracks” for the future. Entry-level salaries for these fraud-detecting accountants go up to $60,000 annually. Robert Half International, a placement firm for financial professionals, estimates that demand for forensic accountant’s increases by 100% per year. The American Institute of Certified Public Accountants recently mentioned that the field of forensic accounting is the hottest career areas in accounting. It is estimated that there will be a shortage of between 25,000 and 50,000 security professionals in the next five years in the U.S. alone. Exciting opportunities for students who become knowledgeable in fraud abound in various federal agencies (e.g. FBI, Postal Inspectors, Department of Justice, Federal Trade Commission, etc.), major corporations and professional service firms. Both the size and the number of frauds are increasing, which will result in even increased demand for fraud-fighting professionals. Reported Identity fraud cases have significantly increases every year from 2000 to 2009.  Credit card fraud is estimated to go from 2 billion in 2002 to 15 billion in 2009. I sure you are all well aware of the trillions of dollars lost in accounting statement fraud in the past few years. Some professional think that this is just the tip of the iceberg. 

In addition to the Members Only part of the ACFE web site, many fraud/forensic accounting related job opportunities within the public sector could be found at:

            http://www.usajobs.gov/contact.asp

Other important links to fraud related jobs are:

http://www.fbi.gov/

http://www.jobs.irs.gov/

 

 


 

 

 

                                   

                  Dr. Holtfreter:

                  Accounting 461

 

I have carefully read the course syllabus for Accounting 461 and completely understand all of its contents. 

 

Signed _____________________________

Date    ____________________________