Accounting and Fraud Investigation for Non-Experts
Howard Silverstone and Michael Sheetz
Published by John Wiley & Sons, Inc.,
2003; ISBN: 0-471-46324-8
304 pages; $50.00 (hardcover)
Reviewed by Vincent J. Love
2005 - The authors of this book start slowly, initially
directing their writing to nonexperts and nonaccountants.
But starting with chapter 5, “The Role of the Accounting
Professional,” the book takes the reader on an intense
ride through the inner workings of a well-structured investigation.
Along the way it delivers sound advice for increasing the
efficiency and quality of the process and the end-product.
The writing style is simple, direct, and descriptive, making
it a pleasure to read. The book would make an excellent
addition to any CPA’s library.
authors demonstrate a deep knowledge of their subject and
an uncanny ability to communicate. The suggested reading
list at the end of each chapter will save much time and
effort searching for additional quality publications.
first four chapters, more suited for non-CPAs that need
to get up to speed on the basics of the topic, cover the
instances of fraud in society with real-life examples of
how fraud is accomplished, including Enron. The title of
chapter 2 says it all: “Understanding the Basics of
Accounting.” Chapter 3, “The Entities,”
simply defines the three general types of business entities—proprietorships,
partnerships, and corporations—and explains their
differences, advantages, and disadvantages. Chapter 4 is
a basic tutorial on financial-statement analysis. The reader
who makes it to this point has finished the simple stuff
and is about to enter into a world of relevant and extremely
important information about the organization and execution
of an investigation.
Two (chapters 5 through 14), aptly titled “Financial
Crime Investigation,” is where the rubber meets the
road. With the same simple but descriptive language, the
authors take the reader for a “walk on the wild side”
of financial crime, investigation, interviewing financially
savvy witnesses, using deductive and inductive analysis,
administrating the investigation, and testifying. Here the
reader will learn about the types of fraud, with ample examples
of real crimes encountered by businesses. It also shows
how businesses are used to further criminal enterprises
and how criminal enterprises have used businesses to facilitate
8 breaks the investigative process down into its major stages,
explaining each in detail so the reader understands what
is done and why. Stage 1 is defined as the evaluation and
goal-setting stage. Stage 2 addresses the planning needed
to maintain the focus of the investigation, control the
process, and build adaptability into the plan. Stage 3 addresses
the conduct of the investigation. In stage 4, the investigator
must collate, analyze, and digest the mounds of documents
collected, and place the relevant data into simple but well-designed
charts, graphs, and exhibits. Next, the case must be assembled
and presented to the prosecuting authority. The last stages
are the trial and the post-trial critique.
chapter 9, on interviewing financially sophisticated witnesses,
the authors lay out the psychological barriers to the type
of communication necessary to reach an interview’s
objectives. They explain the “cognitive interview”
memory-facilitation technique, neurolinguistic programming,
kinesic mirroring, language matching, and paralanguage matching.
They also discuss how to improve the efficacy of the interview.
10, covering analytical techniques for financial crime investigation,
addresses getting organized, the process of proof from the
perspective of inference and relevance, the logic of argument
using the deductive and inductive processes, gathering supporting
data and evidence, and the inferential network analysis
process. Chapter 11 follows with an in-depth discussion
of inferential network analysis, exploring the nature of
inferences, how they are linked, the construction of a chain
of inferences, and the design of an inference model.
12 describes and demonstrates the investigative tool of
a “key list”: a list or database, depending
on the complexity of the case, that contains a numerically
indexed list of propositions and evidence. The authors use
as their example a violent crime rather than a financial
crime, an odd choice that nevertheless does not mar the
valuable information in this chapter. At this point, the
reader has been given a powerful, useful tool for organizing
and analyzing the investigative process: the investigative
with every service that CPAs perform, documentation of the
process is vital. Chapter 13 addresses the type of documentation
needed in an investigation. The authors describe the casebook
system for organizing everything in the life cycle of the
give useful advice on how to structure a casebook.
14, “Testifying in Financial Crime Cases,” explains
the major aspects of giving testimony in a succinct, straightforward
manner, but rightfully suggests that the reader refer to
the many books available on this topic for more in-depth
guidance. Demeanor, appearance, and body language are discussed,
along with credibility, communication, and the need to rehearse.
appendices include an example of a key list (albeit for
a murder), the federal rules of evidence, and a short glossary
of terms used in the body of the book or that have relevance
to financial crime investigations.
J. Love, CPA, is managing partner of Kramer, Love
& Cutler LLP, of New York City. He is also a member of
the CPA Journal Editorial Board and the NYSSCPA’s Quality
Enhancement Policy Committee.