Posted by Kimberly Culcay.

In the article, “What Types of Legal Cases Require a Forensic Accountant,” Henry Rinder describes what a forensic accountant really is and the need for such a professional. The article discusses that there is a difference between a traditional accountant and a forensic accountant. A forensic accountant combines accounting knowledge and legal expertise to help their clients, from individuals to small and large businesses. The forensic accountant is a person that exhibits a curiosity that allows him or her to figure out if a company is hiding something. Some of the legal cases that require forensic accounting are criminal investigations, fraud, shareholder disputes, and divorce. For example, it is common in divorce cases for one party to hide assets to prevent splitting up everything they have.

In criminal investigations forensic accountants help find key elements to help law enforcement officers investigate crimes. Forensic accountants have some duties when being involved in criminal investigations, such as analyzing personal and business documents, tracing and recovering hidden assets, and tracking and reconstructing transactions and wire transfers. From the information provided above, it is easy to see that the need for forensic accountants in the field is growing rapidly. Fraud is something a traditional accountant may stumble upon in their career, but a forensic accountant is a person whose job is to detect it. As stated in the article, some of the duties forensic accountants have when helping with fraud investigations are detecting employee theft and fraud, investigating embezzlement, looking for inconsistencies in financial filings, assessing financial losses, and assisting with insurance claims and restitution orders or agreements.

Fraud falls under the investigative side of a forensic accounting because in a sense the accountant is acting as a detective. The other side of a forensic accountant is they can testify as an expert in court. Personally, I never expected for a forensic accountant to be involved in divorce cases, however if makes sense that a forensic accountant will usually assist in dividing assets and other valuables owned by one or both spouses during the marriage. Asset tracing is a key way for a forensic accountant to detect if someone has tried to conceal assets. Amongst others, some of the duties forensic accountants have helping with divorce cases are evaluating a spouse’s personal and business statements, tracing assets, debts, income, determining the value of concealed assets, ensuring equitable distribution and helping with divorce negotiations. Overall, the forensic accountant is there to help a spouse so that he or she has an opportunity for a fair and equitable distribution of the assets.

I think that with the evidence presented in this article it is evident that there is a need for forensic accountants in legal cases when it relates to finances. Forensic accounting is interesting to me because I always wanted to be a detective, but I knew that the job market was not going to consistent.  Therefore, it is exciting to find out that forensic accountants can serve the public in this way.

Kimberly is a graduate forensic accounting student at the Feliciano School of Business, Montclair State University.

Reference: Rinder, Henry. “What Types of Legal Cases Require a Forensic Accountant.” Smolin Lupin. 7 Oct. 2014. Web. 21 Oct. 2015. .

Posted by Randy Gomez.

In Business Law class, I learned about business ethics and how an entity should behave as a good citizen. In this article that I found online, it explains how the Federal Communications Commission fined AT&T 100 million dollars for slowing down data speeds to some customers. According to the FCC, AT&T violated a transparency rule by misleading customers saying that their plans were unlimited, when there was a maximum speed that customers would receive. AT&T is accused of not sufficiently informing its subscribers. The FCC chairman Tom Wheeler said “consumers deserve to get what they paid for,” and that, “[b]roadband providers must be upfront and transparent about the services they provide.”

It seems that the corporation was trying to maximize their short-term profits, by not being clear enough about the services provided to the consumer. As it usually happens when a corporation acts unethically to increase their profits, AT&T hurt their profits and now is receiving bad publicity. This is a great example of why companies have to take in consideration moral and ethical principles toward their decisions, instead of just trying to maximize profits.

Randy is a business administration major with a concentration in finance at Montclair State University, Class of 2017.

Posted by Abier Mustafa.

Cell phone Company, AT&T, has agreed to pay back $105 million in what is being called ”the largest cramming settlement in history.” AT&T has been adding unauthorized charges to tens of thousands of customers’ monthly bills. The charges are usually for the amount of $9.99 per month, coming from third-party services, including trivia, horoscopes, and love tips.  ”AT&T is accused of keeping at least 35% of the fees, as well as obscuring the charges on bills and preventing customers from securing full refunds.”

There have been previous lawsuits against other cell phone providers besides AT&T.  For example, the Federal Trade Commission has filed a similar lawsuit against T-Mobile in the past also due to unethical charges to customers.  “For too long, consumers have been charged on their phone bills for things they did not buy,” Wheeler, the Federal Communications Commission chairman, said- “It’s estimated that 20 million consumers this year are caught in this kind of trap, costing hundreds of millions of dollars.”

AT&T has released a statement saying that they have provided customers with “Premium Short Messaging Services” in the past. However, they have discontinued third-party billing.  To resolve all claims, $80 million of the settlement has been set aside for customer refunds, along with $25 million in penalties due to regulators.

So if you’re an AT&T customer and have been wrongfully charged, you may be eligible for a refund!

Abier is a finance major at Montclair State University, Class of 2016.

Posted by Katie Kim.

In the technology industry, two leading companies may be heading to the Supreme Court over the design of smartphones. There is no confirmation of whether or not the case will be accepted, but the Supreme Court has not taken a design patent in over a century.

A few weeks ago, Samsung agreed to pay Apple $548 million in damages over a design patent but did not agree to it as part of a settlement. Apple took Samsung to court on the grounds that Samsung intentionally and knowingly copied Apple’s iPhone designs. Apple prides themselves on their innovation and when the threat of copycats infringe on their innovations it takes away from their profits. Apple submitted evidence that showed the evolution of the Samsung product increasingly resembled the Apple iPhone

At trial, Apple convinced the jury that some of the designs Samsung used on their smartphones, like the rounded rectangular corners and touch screen made of smaller icons, were taken from and patented by Apple.

On the other hand, Samsung argued that the law under design patents was misapplied. The law is meant to protect “ornamental” features that are not part of the products intended function. Samsung lawyers feel that this should have been made clear to the jury.

On Monday, Samsung filled an appeal to the Supreme Court. The company argues that the legal framework behind designed patents is flawed and out dated for the modern digital world. “The law was written for a time long before the smartphone was invented,” said Mark A. Lemley, a law professor and director of the Stanford University program in law, science and technology. If Samsung is left to stand with a sweeping rule against it then it will “lead to absurd results and have a devastating impact on companies.”

Katie is an accounting and finance major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Stephen D’Angelo.

Friday morning, two days after the judge presiding the Uber class action lawsuit decided that drivers attempting to arbitrate can be included in the law suit, Uber sent drivers a new agreement. The document undermined the judge’s ruling by revising the arbitration clause.

Liss-Riordan and her team are filing an emergency motion that will be heard in front of Judge Edward Chen next Thursday; it asks the court to block Uber from enforcing this new driver agreement. “Uber has tried to fix the problem that Judge Chen ruled made the agreement unenforceable,” Liss Riordan told TechCrunch in an email.. The Private Attorney General Act gives “a private citizen the right to pursue fines that would normally only be available to the State of California. It also allows that private citizen to “seek civil penalties not only for violations that he personally suffered” but also for violations of “other current or former employees.”

According to Chen’s Wednesday ruling, the Uber driver agreement of 2014 and 2015 illegally waived drivers’ rights under PAGA, which informed Judge Chen’s decision that the arbitration clause could not be honored because it contained an illegal provision. This was the reason for the provision of the agreement, to quickly remove the illegality and include new provisions to the agreement.

The Private Attorney General Act protects uber drivers from what uber has tried to prevent, a large action against the company. Uber has agreed to resolve any claim against the company but only on an individual basis. Uber’s driver agreement provision also attempts to prevent workers from participating in any class collective or representative action against the company. Uber also rewrote the agreement to remove a requirement that arbitration between a driver and the company remain confidential. The language makes it clear that the agreement goes into effect only when a driver accepts it  not when a revision is published, therefore, protecting drivers who previously signed the agreement.

Stephen is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2017.

Posted by Da’Naysia Aarons.

In an article called, “Lawsuits and Consumer Reporters Fight Home Warranty Companies,” Heidi Turner discusses how home warranty companies are being sued by consumers. An investigative reporter was asked to look into a company called Sensible Home Warranty who was allegedly selling consumers a warranty policy. However, when one consumer asked for a new microwave, Sensible Home warranty refused to pay out her claim. While investigating the company, a reporter name Michelle Mortensen found that Sensible Home Warranty has more than 1,950 complaints. In the article it states, “An investigation into the company was undertaken by the Nevada Division of Insurance but in the meantime, the company reportedly went out of business.”

Due to the fact that the company was mistreating their consumers and taking advantage of their money, the company was fined $5,000 dollars for not complying with the state’s Service Warranty Act. In the article it further states, “The business failed to pay legitimate claims made on home warranty contracts sold in the State of Utah, or to pay them in a timely manner, and the business failed to respond to inquiries of the commissioner.”

Since many other home warranty companies have been taking advantage of other consumers, lawsuits have been filed against them.

Da’Naysia is an international business major at Montclair State University, Class of 2017.

Posted by Ivanna Klics.

There has been quite a ruckus at Wells Fargo as they made headlines for causing fraudulent transactions that have not been authorized by the customers themselves. Wells Fargo is being accused for creating banking and credit card accounts without the permission of its customers. Who are the customers more to blame then the CEO, John Stumpf; however, in his defense, he is not capable of overlooking every branch in the bank. Stumpf’s leaders have not only stepped out of their comfort in the company but the reputation of the company, as well as opening up the door to a criminal investigation case.

The investigation has put the company to shame. Stumpf appears to be clueless of what has been going on literally right under his nose. Because it is almost impossible for these events to occur overnight, management should have known about it for a long time. Whether Stumpf admits it or not, Charles Gasparino stated “he and the bank will still face numerous civil and criminal inquiries for years to come.”

Although the company does not mean all harm, Wells Fargo is still one of the most profitable banks worldwide; however the company’s perception has had a dramatic change. Currently the company is facing a congressional investigation, and who knows if they will be able to build back their reputation.

Ivanna is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2019.

Posted by Luca Aufiero.

In the article, “BizEquity Launches Online Valuation Tool for Accountants,” Daniel Hood discusses how BizEquity, an online business valuation system for businesses to be able to estimate the value of their businesses, launched a new product called Accountant Office. For accountants and advisors, this new business solution of BizEquity successfully improves the valuation process. Using a keen platform for its refined algorithms and big data knowledge, accountants and advisors will be able to provide clients with real-time awareness of what their business is really worth, more efficiently and cheaply. Accountant Office costs less than one-tenth of the average business valuation fee of $8,000. It can also deliver a valuation report in minutes compared to the average time of 3-6 weeks it takes for traditional business valuation firms to deliver a valuation. BizEquity’s business solutions help companies create, manage, and optimize its business valuations. This may revolutionize the business valuation landscape pertaining to forensic accounting as technology and data cloud services are evolving among the profession.

Currently, BizEquity is one of the world’s largest providers of business valuations, valuing more than 29.4 million companies around the globe. PrimePay, one of the nation’s biggest private payroll companies and a network of more than 10,000 accountants, will be exclusively distributing Accountant Office in the U.S. The founder and CEO of BizEquity, Michael Carter, wanted to expand the views of the capabilities that accountants are perceived at by demonstrating their value in business advisory and not just tax planning. Somewhat as their motto and the first thing that stands out on their website, reads “What’s Your Business Worth?” BizEquity conveys the importance of business valuation to owners and to those accountants and advisors who will benefit from these tools in order to better inform them. With proper valuation knowledge, companies are in a more desirable position in determining the fair value of selling a business, ability to secure financing, and striving for growth.

Luca is a BS and MS in Accounting, Forensic Certificate Program, at the Feliciano School of Business, Montclair State University. 

Reference:

Hood, Daniel. “BizEquity Launches Online Valuation Tool for Accountants.” Accounting Today. 20 Oct. 2015. Web. 20 Nov. 2015. http://www.accountingtoday.com/accounting-technology/news/bizequity-launches-online-valuation-tool-for-accountants-76144-1.html

Posted by Dana Domenick.

A four year old boy was riding in his aunt’s 1999 Jeep Cherokee when it was rear-ended in 2012. He was killed when the SUV burst into flames. The gas tank on this Jeep Cherokee model is located behind the rear axle which means when the truck is hit from behind, it will likely trigger an explosion. The location of the gas tank is a major flaw in the truck and caused over 75 deaths. Fiat Chrysler took action on this issue in 2013, by recalling over 1.56 million Jeep Cherokees manufactured from 1993-1998 (Associated Press).

Judge J. Kevin Chason in Decatur County, Georgia ordered $40 million in damages to the child’s family. Three fourths of the damages were given to the family for his death while the other portion was given for pain and suffering. Fiat Chrysler requested a new trial, claiming that the jury acted irrationally and their prejudice tainted the verdict. Their motion was denied by the judge (Associated Press).

I agree with the court’s decision. The engineers who built these Jeeps should have had enough knowledge to place the car’s parts at locations in which they were protected. Extensive road testing should have been conducted on every vehicle to play out every possible collision scenario to ensure that the quality of the vehicle met the highest efficiency and safety standards. This death, as well as the many others caused by this issue, could have been prevented had Fiat Chrysler took their road testing more seriously and therefore, the verdict was correct.

Dana is a psychology major with a legal studies in business minor at Seton Hall University, Stillman School of Business (minor), Class of 2017.

Posted by Daphine Llosa.

A recent legal issue involves money laundering, embezzlement and fraud. Money laundering is a form of obtaining money illegally, usually by using transfers between banks and businesses. Embezzlement is theft or misappropriation of funds. Fraud is a wrongful deception for the purpose of attaining financial or personal gain.  On Friday, October 23, 2015 the New Mexico Republican Secretary of State, Dianna Duran, plead guilty of fraud. The state attorney general, Democrat Hector Balderas, filed 65 charges against Ms. Duran in August 2015 which included; fraud, embezzlement, money laundering and campaign finance violations. Investigations revealed that she used about $13,000 of the donations from her campaign to clear gambling debt around the state and to cover other personal matters. In order to hide the transfers to personal accounts, Ms. Duran altered the campaign finance reports. Ms. Duran had a hearing with her defense lawyer, Erlinda Johnson, and after refusing multiple times from leaving office she resigned. According to the New York Times, in hopes that she can receive five years of probation and get spared prison time, Ms. Duran pled guilty to six out of the sixty-five charges; four misdemeanors and two felonies. She stated that for her best interests, her loved ones and for all of New Mexico’s residents; she will be seeking for professional help due to her non-ethical and corrupt actions.

It had been a little over 80 years since New Mexico had a Republican serve as secretary of state. She ranked as the second highest elected official in New Mexico, where she served as state senator prior to becoming the 24^th Secretary of State. Susana Martinez, Governor of New Mexico, received the resignation letter provided by Ms. Duran, which stated; ‘Although I may be leaving office, I shall always reflect upon the last 36 years of service, honored to work with you and other, serving the citizen of New Mexico.’ As of today, deputy secretary of state, Mary Quintana is fulfilling Ms. Duran’s place until the governor chooses who will be replacing her until the upcoming election in 2016. Any further and additional details or information regarding Ms. Duran’s replacement or charges will be released in the coming weeks. The degree of punishment and the formal legal consequences applied to Ms. Duran is scheduled to be on December 14, 2015.

Daphne is a graduate student in accounting with a Certification in Forensic Accounting, at the Feliciano School of Business, Montclair State University, Class of 2016.

Posted Layla Alzahrani.

Embezzlement is money stolen by an unethical person. According to the article, 40 percent of small businesses in the United States will be targeted for average loss of $ 140,000,00.00, but embezzlement is only reported two percent of the time. Most of the embezzlers are trusted and long-term employees or family friends, or relatives. Victims’ trust usually is shattered after embezzlement happened, especially if embezzlers are their friends or relatives. According to forensic psychologists, victims have lack of judgment to discover the perpetrators before embezzlement happens.

It is difficult to discover employees who follow no pattern and offer no outward signs. Embezzlement sometimes is committed by people who do not have previous criminal records and and may have reputations beyond reproach. There are warning signs, however, that can show as evidence of employees’ behavior before the theft is uncovered, such as: enthusiastic employees who ask questions about business processes and procedures; employees who have excessive debt because of divorce or drug abuse; and employees who refuse to take time of their job, and who want to work when no one is around. Usually embezzlers have a hostile attitude if they get questioned about financial transaction.

Moreover, there are three factors must be present before a person can commit fraud; they are need, opportunity, and rationalization. Some examples of need are addiction to drugs, alcohol, and gambling. Rationalization appears when an employee believes that his/her illegal action fits within a personal code of conduct or ethic, which means that an embezzler steals because they see that as situational fraud. However, embezzlement can be discovered if accountants find amounts of expenses that are not consistent with historical norms or budget, documents are missing or incomplete, problems of bank reconciliations, and documents are adjusted without adequate support.

Preventing embezzlement can be difficult because there is no sure-fire method that can prevent it. Some examples that make it difficult to prevent fraud are issuing fictitious checks, invoking products that a company does not need it, issuing cashing checks for return products that not actually returned, forging checks and destroying them, and charging patients more than a duplicate invoice. There are some precautions that clients can take to prevent fraud such as doing an extensive background check before hiring an employee, tracking a person’s checks and verifying them, making bank deposits nightly, reconciling the bank and credit card statements, and requiring vacations. Those handing funds must be closely and routinely monitored in a company to insure that all profit within the practice and not in someone’s pocket.

Layla is a graduate accounting student with a concentration in forensic accounting at the Feliciano School of Business, Montclair State University.

Source:

Tranyor, Robert M. (2016) Embezzlement Could it Really Happen to You?, Audiology Today, Vol. 28. No. 4.