Sponsored by the Technology Assurance Committee

SAS 99: Detecting Fraud Using Benford’s Law and Preventing Computer Fraud in Small and Medium Size Companies
Thursday March 13, 2003 5:30 P.M. To 8:30 P.M.

The new generally accepted audit standard relating to Fraud - SAS 99 has recently been issued. It includes specific guidance for fraud detection procedures in financial statement audits. SAS 99 mandates new audit procedures relating to fraud and with the passage of the Sarbanes - Oxley Act, can subject the practitioner to larger penalties then where previously exposed to for non-compliance. In the wake of Enron, WorldCom, and other financial surprises, clients, bankers, users of audited financial statements as well as the general public have increasing expectations on the ability of the external auditor to detect fraud. Potentially, the public’s expectations and the liability for auditors to detect fraud may be no less for audits of non-public small and medium size entities than for SEC audits.

Part One of this session will address Benford's Law, which is a mathematical phenomena that has existed in theory for over 100 years. Yet, it wasn't until approximately 10 years ago, that an auditor applied the theory behind Benford's Law to identify potentially fraudulent transactions and financial trends. The idea behind Benford’s Law is that the numerical value of a transaction can be used to identify potential fraudulent transactions. This presentation will discuss the history, theory and practical uses of Benford's Law and will help you identify fraud trends in financial statement audits or fraud investigations.

The second part of the presentation will cover specific requirements of SAS 99 as it applies to computer fraud in small and medium size companies.

The topics cover will be:

Date: Thursday March 13, 2003

Time: 5:30 P.M. to 8:30 P.M.

Presenters: Christopher J. Rosetti, CPA, CFE, DABFA. KPMG
Bruce H. Nearon, CPA. J.H. Cohn LLP

Location: NYSSCPA Headquarters, 530 Fifth Ave, Fifth Floor, New York City

Additional Information

This FAE/NYSSCPA CPE evening technical session has been organized by the NYSSCPA Technology Assurance Committee (TA). Attendees will earn three (3) CPE credit. Sandwiches and soft drinks will be provided by J.H. Cohn LLP. More information on the TA committee can be found at www.nysscpa.org. Click on the committees tab on the left and scroll down to the TA committee. The cost of the session is $45 for NYSSCPA members, and $50 to non-members. Advance registration is encouraged because seating is limited. There is an additional $25 walk-in fee for those that register at the door.

Registration

To register contact the Foundation for Accounting Education (FAE) at 212-719-8383. Using their State Society member number, State Society members can register at www.nysscpa.org.

For additional information contact Gary Carpenter at 315-487-4567 gcarpenter-cit@worldnet.att.net or Bruce Nearon at 973-403-6955 bnearon@jhcohn.com.

About the Presenters

Christopher J. Rosetti, CPA, CFE, DABFA, is a Director for KPMG's Forensics unit. He previously spent four years conducting financial statement audits for KPMG before leaving to work as a confidential investigator for a governmental investigative agency. In addition to conducting fraud investigations and compliance and integrity reviews for KPMG, Chris spent five years teaching accounting related courses at Siena College and developed and taught a forensic accounting course for Utica College. He has authored seven articles, qualified and testified as an expert witness and given more than 50 fraud and/or forensic presentations to various private and public organizations. Chris also served also a National Fraud Instructor for KPMG's recruits, has been a presenter at the last three annual seminars hosted by the Association of Certified Fraud Examiners (ACFE), has developed training and self study courses for the ACFE, and is an instructor for the Person Wolinsky CPA Review Course.

Bruce H. Nearon, CPA is the Director of IT Security Audit for The Cohn Consulting Group, a division of J.H. Cohn LLP, Roseland, New Jersey, and is Chair of the NYSSCPA Technology Assurance Committee. He is also a member of the Auditing Standards and Procedures Committee, the Information Systems Audit and Control Association, and an associate member of the Information Security Committee, Science and Technology section of the American Bar Association.

He received the AICPA Elijah Watt Sells Award for performance with high distinction on the May 1989 CPA exam and holds a Bachelors degree in Accounting (1986) and a Masters of Accountancy (1988) from the University of Florida.

Mr. Nearon is a frequent speaker at professional auditing and information technology seminars, and has published numerous articles in professional publications on IT auditing and network security.

Acknowledgments

We appreciate the generous contributions of J.H. Cohn LLP and Carpenter Information Technologies, which provided funding for the sandwiches and refreshments."

"We also appreciate the generous contribution of time by Gary Carpenter of Carpenter Information Technologies for his effort in this event."