PENN STATE UNIVERSITY
THE SMEAL COLLEGE OF BUSINESS
DEPARTMENT OF ACCOUNTING
COURSE SYLLABUS
Course
ACCTG 803 - Forensic Accounting (3 credits)
Prerequisites
ACCTG 403W and 471 with a grade “C” or better
Required
Texts
Richard Proctor and Patricia Poli (2014). Proli Footwear: An Audit and Fraud
Simulation for Team-Based Student Learning, 2nd ed., loose-leaf and
punched. ISBN: 978-1-62751-537-5.
Joseph T. Wells. Principles of Fraud Examination, 4th ed. 2013. Wiley & Sons.
ISBN: 978-1-118-58288-6.
Description
To familiarize students with the investigative accounting, litigation support, and
consulting activities typically performed during a fraud examination.
Topics
1. Fraud examination methodology
2. Research in occupational fraud and abuse
3. Skimming and cash larceny schemes
4. Billing schemes and check tampering schemes
5. Payroll schemes and expense reimbursement schemes
6. Register disbursement schemes and noncash misappropriations
7. Fraudulent financial statement schemes
8. Conducting investigations and writing reports
9. Interviewing and interrogation techniques
10. The Sarbanes Oxley Act of 2002 and AICPA Code of Conduct
11. Assessing the risk of fraud in a financial statement audit
12. Audit procedures to detect fraud
Students that complete this course will be able to:
Student
Learning
Objectives
1. Recognize intentional financial fraud schemes and differentiate intentional
fraud from unintentional human error.
2. Examine and analyze documentary evidence for the purpose of identifying
embedded financial fraud schemes and human errors.
3. Exercise professional judgment and discretion in evaluating and
interpreting the documentary evidence for the presence of fraud.
4. Generate conclusions about the presence of fraud and document the basis
for your conclusions.
5. Develop proposed adjusting journal entries to correct all instances of fraud
and error and document support for your entries.
6. Communicate findings of fraud and error to those charged with
governance.
7. Communicate internal control deficiencies and material weaknesses to
those charged with governance.
Syllabus Subject to Change, Last Revised August 2014
1
COURSE INFORMATION
Instructor Contact and Meeting Information:
Instructor: Patricia A. Patrick, PhD, CPA, CFE, CGFM
Contact Information:
Office Phone:
Office Location:
Office Email:
Home Phone:
Home Email:
814-867-5799
BUS 377
pap157@psu.edu
814-808-6566
ppatrick123@comcast.net
Course Name:
Course Meeting Time:
ACCTG 803.401 – Forensic Accounting (3 credits); Fall 2014
MW 01:00 p.m. to 02:15 p.m., BUS 004
Office Hours:
MW 11:15 a.m. – 12:45 p.m., BUS 377
TR 06:00 p.m. – 07:00 p.m., BUS 377
Other appointments available upon request
Teaching Schedule:
ACCTG 403W.001 TR 08:00 – 09:15 a.m., WGR 316
ACCTG 403W.003 TR 09:45 – 11:00 a.m., WGR 316
ACCTG 403W.004 TR 11:15 – 12:30 p.m., WGR 316
ACCTG 803.501 MW 09:45 – 11:00 a.m., KLR 211
ACCTG 803.401 MW 01:00 – 02:15 p.m., BUS 004
Grading System and Course Requirements:
Class Discussions: Students will lead class discussions on fraud topics using PowerPoint
slides. Students will submit draft slides, incorporate instructor feedback, and have their final
slides revised and approved no later than 1-week prior to their scheduled discussion dates. A
list of student assignments will be distributed the first day of class. When possible, students will
identify the fraud schemes, the likely perpetrators, and ways to prevent and detect the schemes.
Students will submit both hardcopy and electronic versions of their draft and final slides. Nonpresenting students should read come to class prepared to participate in the discussions.
Fraud Simulation: Students will complete assignments from the Proli Footwear Fraud
Simulation. Students will work in teams but will compile their own work-papers. Students on
teams need not agree on conclusions. Students will hand-deliver work-papers no later than the
due dates. Students may not place work-papers under office doors or in mailboxes. Workpapers should be bound with paperclips and cycles submitted intact. Work-papers prepared or
delivered contrary to these procedures or those below may be subject to penalties.
Points will be earned as follows:
Proli Fraud Simulation:
Assignment #1 – Perm File
Assignment #2 – Planning File
Assignment #3 – Cash
Assignment #4 – Accounts Receivable
Assignment #5 – Inventory & Accounts Payable
Assignment #6A – Property, Plant & Equip
Assignment #7A – Current Liabilities
Subtotal - Proli Assignments
Class Discussions
Total
2
50 pts
50 pts
100 pts
100 pts
100 pts
100 pts
100 pts
600 pts (90%)
100 pts (10%)
700 pts(100%)
Grades will be assigned as follows:
A =
A- =
B+ =
B =
B- =
C+ =
C =
C- =
D+ =
D =
F =
100% to 95%
94% to 90%
89% to 86%
85% to 82%
81% to 78%
77% to 74%
73% to 70%
69% to 66%
65% to 62%
61% to 58%
Below 58%
At least 665 points
At least 658 points
At least 623 points
At least 595 points
At least 567 points
At least 539 points
At least 511 points
At least 483 points
At least 455 points
At least 427 points
426 points or fewer
GRADING RUBRIC FOR WORK-PAPERS
Accuracy – Accuracy refers to the accuracy and completeness of your work-papers. Auditing
requires professional judgment, so students may have slightly different entries. That is not the
meaning of accuracy. The work-papers contain mistakes made by the client. Students are
expected to find and correct those mistakes. Students should complete and submit all the workpapers in a cycle, unless told otherwise by the instructor.
Neatness – Neatness refers to whether your work-papers are tidy, organized, and readable. It
also refers to the legibility of your handwriting. Your work-papers should be as neat as those
expected by an employer. Work-papers will be handwritten and completed in pencil. Workpapers may not be completed in pen or prepared electronically.
Indexing and Pagination – Indexing and pagination refers to the use of page numbers,
indexes and tick-marks. Indexing and pagination refers to the integration of your work-papers.
Amounts used on one work-paper must be cross-referenced to those amounts on other workpapers. Indexing and pagination is done in colored pencil. Tick-marks are symbols used to
describe audit steps. Auditors identify items on the work-papers where steps are performed with
tick-marks. You describe the steps you did in tick-mark legends. Tick-marks are done in colored
pencil. Tick-mark legends are in lead pencil.
Clarity – Clarity refers to the understandability of your analyses. Work-papers should contain
well-labeled and clear explanations and supporting calculations. Tick-marks should clearly
describe the steps performed. Work-papers should describe the reasons for proposed adjusting
entries and enable someone not on the audit to understand what you did and the reasons for
your decisions.
Conventions – Conventions refer to whether work-papers adhere to audit conventions. For
example, auditors do not usually cross out client amounts with which they disagree (except
footing errors, which may be crossed out and replaced with the correct amounts). Instead,
auditors reference the client’s incorrect amounts with tick-marks and explain the client’s
mistakes at the bottom of work-papers. Auditors make proposed adjusting journal entries to
adjust client’s mistakes and show those entries on the work-papers where the mistakes were
found and on the summary lists of proposed entries. Auditors show support for calculations.
GUIDELINES FOR POWERPOINT SLIDES
Format – Use the same topic heading for all the slides pertaining to the same idea and center
main topic headings. Use left justified subheadings to differentiate topics within the main idea.
Use short phrases, rather than long sentences. Avoid punctuation when possible or use it
consistently. Avoid improper capitalization and spelling errors. Use appropriate levels of
indentation to list ideas within key topics. Use indented lists when appropriate. State your ideas
as concisely as possible.
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Content – The content of each slide should be clear to the audience without verbal elaboration.
Expect your audience to be unfamiliar with your topic. Your slides must enable the audience to
understand the basic content and organization of your slides by reading your slides and without
your verbal elaboration. Proper organization of content and use of appropriate headings and
subheadings will accomplish this objective. Slides should contain a title page, table of contents,
and conclusion.
PENN STATE POLICIES
Academic Integrity: According to the Penn State Principles and University Code of Conduct:
Academic integrity is a basic guiding principle for all academic activity at Penn State University,
allowing the pursuit of scholarly activity in an open, honest, and responsible manner. According to
the University’s Code of Conduct, you must neither engage in nor tolerate academic dishonesty.
This includes, but is not limited to cheating, plagiarism, fabrication of information or citations,
facilitating acts of academic dishonesty by others, unauthorized possession of examinations,
submitting work of another person, or work previously used in another course without informing
the instructor, or tampering with the academic work of other students.
Any violation of academic integrity will be investigated and, where warranted, corrective
academic and/or disciplinary action will be taken. For every incident where a penalty is
assessed, an Academic Integrity Incident Report form must be filed. The form can be found on
the Smeal College website at this URL http://ugstudents.smeal.psu.edu/honor. This form is to
be used for undergraduate courses. The report must be signed and dated by both the instructor
and the student, and then submitted to the office of Jeff Sharp, Associate Dean for
Undergraduate Education, 202 Business Building.
Smeal Honor Code: We, the Smeal College of Business Community, aspire to the highest
ethical standards and will hold each other accountable to them. We will not engage in any action
that is improper or that creates the appearance of impropriety in our academic lives, and we
intend to hold to this standard in our future careers.
Plagiarism/Copying: All the work you submit for grading or academic credit is designed to
reflect your personal knowledge and skill related to the course subject matter. Unless otherwise
indicated, all work submitted is to be done on an individual basis. This includes but is not limited
to all exams, quizzes, homework, papers, written assignments, and presentations.
Plagiarism is claiming work as your own that you have copied from another person, whether that
other person knows about it or not. This includes copying from web sites without proper source
citation and using homework or papers prepared by current or past students whether working as
an individual or working in a group / team.
Disagreements or Complaints Relating to Penn State Coursework, The Instructor or a
Fellow Student: In the event you have a class related disagreement or complaint with the
instructor or fellow student, you are advised first to address the matter with the course instructor
privately. If the matter remains unresolved, you may contact the department chairperson of the
departmental unit offering the course. Only after these steps have been followed may the
Dean's Office be able to engage its authority to resolve the matter. Each party is encouraged to
resolve the dispute with those immediately involved.
Affirmative Action & Sexual Harassment: The Pennsylvania State University is committed to
a policy where all persons shall have equal access to programs, facilities, admission, and
employment without regard to personal characteristics not related to ability, performance, or
qualifications as determined by University policy or by Commonwealth or Federal authorities.
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Penn State does not discriminate against any person because of age, ancestry, color, disability
or handicap, national origin, race, religious creed, gender, sexual orientation, or veteran status.
Related inquiries should be directed to the Affirmative Action Office, 328 Boucke Building.
Students with Disabilities: Penn State and the Smeal College of Business welcome students
with disabilities to all of its classes, programs and events. The Penn State Office of Disability
Services (ODS) in Room 116 Boucke Building provides a vast array of services for students with
disabilities according to mandates under Title II of the ADA amendments Act of 2008 and
Section 504 of the Rehabilitation Act of 1973. For more information or to meet with a service
provider from ODS, contact them at (814) 863-1807 (V/TTY) or visit their website at:
http://equity.psu.edu/ods
In order to receive consideration for reasonable accommodations, you must contact the Office
of Disability Services, participate in an intake interview, and provide documentation:
http://equity.psu.edu/ods/guidelines. If the documentation supports your request for reasonable
accommodations, ODS will provide you with an accommodation letter that you will need to
share with the instructor as early in the course as possible. Adjustments will be made based on
the recommendations in the accommodation letter. This process must be followed each
semester that accommodations are requested.
Deferred Grades: Students will not receive deferred grades without the consent of the
Associate Dean for Undergraduate Education. The only circumstances considered for deferred
grades are: 1) personal or family emergencies occurring late in the semester and which prevent
the student from attending the final exam or submitting a paper; and 2) attendance at a
university-approved event that prevents the completion of a scheduled final exam.
Disruptive Behavior: Disruptive behavior interferes with the operation of the classroom and the
rights of others. Students are expected to refrain from disruptive behaviors. Disruptive students
may be asked to leave the classroom for the remainder of the class period. Chronically
disruptive students will be reported to the Associate Dean for Undergraduate Programs. Chronic
disruptiveness is handled as a student conduct proceeding by the Office of Student Conduct.
Students involved in such proceedings may not be permitted to return to class until all
proceedings have been completed.
Registration: The student registration process at Penn State is a two-step process. First
students register for courses. Second, students complete registration by payment of applicable
tuition and fees. Students who have not completed their registration are clearly indicated on all
forms of the class list, by the message "Registration Not Complete." The faculty is not obligated to
instruct or assess these students. If you are in this status you should contact the Registrar's
office immediately.
i
Student Guide to General University Policies and Rules, http://studentaffairs.psu.edu/conduct/pdf/PoliciesRules.PDF
ii
Code of Conduct, http://studentaffairs.psu.edu/conduct/codeofconduct/; The Pennsylvania State University, Office of
Student Affairs. Also see: http://studentaffairs.psu.edu/conduct/
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COURSE CALENDAR
#
1
2
3
4
Day
M
W
M
W
Date
Aug 25
Aug 27
Oct 1
Sep 3
5
M
Sep 8
6
W
Sep 10
7
M
Sep 15
8
W
Sep 17
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
17
18
19
20
21
22
23
24
25
M
W
M
W
M
W
M
W
M
W
M
W
M
W
M
W
M
W
M
W
M
W
M
W
M
Sep 22
Sep 24
Sep 29
Oct 1
Oct 6
Oct 8
Oct 13
Oct 15
Oct 20
Oct 22
Oct 27
Oct 29
Nov 3
Nov 5
Nov 10
Nov 12
Nov 17
Nov 19
Nov 24
Nov 26
Dec 1
Dec 3
Dec 8
Dec 10
Dec XX
Topic/Assignment
Intro to Forensic Accounting and Litigation Support
Fraud Film - Crazy Eddie (interview with Sam Antar)
No Class- Labor Day Holiday
Wells - Introduction (chp 1) and Big Picture (chp 17)
Wells – Skimming (chp 2) and Cash Larceny (chp 3)
Wells – Billing Schemes (chp 4) and Check Tampering (chp 5)
Wells – Payroll Schemes (chp 6) and Exp. Reimb. Schemes (chp 7)
Wells – Register Schemes (chp 8) and Noncash Assets (chp 9)
Wells – Corruption (chp 10) and Accounting Principles (chp 11)
Wells – F/S Fraud (chp 12) and Ext. Fraud Schemes(chp 13)
Wells – Fraud Risk (chp 14), Investigations (chp 15), Hx of Fraud
Wells – Interviewing (chp 16) and Interrogations (chp 16)
Expert Witness Testimony (T. Singleton), Codes of Conduct
State Whistle-blowing Laws (ACFE article)
Proli Assignment #1 – The Permanent File
Proli Assignment #1 – The Permanent File
Proli Assignment #2 – Planning the Audit
Proli Assignment #2 – Planning the Audit
Proli Assignment #3 – Cash Cycle
Proli Assignment #3 – Cash Cycle
Proli Assignment #3 – Cash Cycle
Proli Assignment #3 – Cash Cycle
Proli Assignment #4 – Acct Rec Cycle
Proli Assignment #4 – Acct Rec Cycle
Proli Assignment #4 – Acct Rec Cycle
Proli Assignment #4 – Acct Rec Cycle
Proli Assignment #5 – Inventory Cycle
Proli Assignment #5 – Inventory Cycle
.
Proli Assignment #5 – Inventory Cycle
Proli Assignment #6 – Fixed Assets Cycle
Proli Assignment #6 – Fixed Assets Cycle
Proli Assignment #6 – Fixed Assets Cycle
No Class – Thanksgiving Holiday
No Class – Thanksgiving Holiday
Proli Assignment #7 – Liabilities Cycle
Proli Assignment #7 – Liabilities Cycle
Proli Assignment #7 – Liabilities Cycle
Proli Assignment #7 – Liabilities Cycle
Fraud Film – Cooking the Books (interviews with actual fraudsters)
6