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Crossing the Line - Cases in Financial Statement Fraud and Auditor Deception (Course Id 1323)

QAS / Registry
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Author:

Joseph P Helstrom, CPA

Course Length:

Pages: 16 ||| Word Count: 8078 ||| Review Questions: 3 ||| Final Exam Questions: 5

CPE Credits:

1.0

IRS Credits:

0

Price:

$12.95

Passing Score:

70%

Course Type:

Text
Crossing the Line - Cases in Financial Statement Fraud and Auditor Deception - CPE course for CPAs

Technical Designation:

Technical

Field Of Study:

Auditing

Approved Audience:

NASBA QAS - NASBA Registry

Key Takeaways:

This course examines the Dewey and LeBouef and ContinuityX financial statement fraud cases to illustrate how fraud was perpetrated and undetected by auditors.

  • Examines how personnel at Dewey and LeBouef made inappropriate financial adjustments to meet bank lending covenants before declaring bankruptcy in 2012.
  • Examines how ContinuityX, an internet services reseller, fabricated 99% of its revenue according to an SEC complaint before declaring bankruptcy in 2013.
  • Satisfies the California Board of Accountancy fraud CPE requirement through its coverage of these two cases.
  • Worth 1.0 CPE credit in Auditing as a self study text course on financial statement fraud and auditor deception, requiring a 5 question final exam preceded by 3 review questions (optional) and a 70% passing score.

Frequently Asked Questions:

This Crossing the Line text course notes that Dewey and LeBouef had over 3000 employees and over 1400 lawyers at its peak before its fraud was uncovered.

This course notes that Dewey and LeBouef declared bankruptcy in 2012 following its financial statement fraud.

This course notes that ContinuityX fabricated 99 percent of its revenue, according to an SEC complaint.

This course notes that the audit partner responsible was fined and permanently suspended from practicing before the SEC.

Crossing the Line Cases in Financial Statement Fraud and Auditor Deception is a Technical, self study text course in Auditing worth 1.0 CPE credit, requiring a 5 question final exam preceded by 3 review questions (optional) at a 70% passing score. CPEthink is approved by NASBA as a CPE sponsor and lists this course on the NASBA site as a courtesy for CPAs to search https://nasba.org. These fraud CPE credits satisfy the California Board of Accountancy fraud requirement.

Yes, Crossing the Line Cases in Financial Statement Fraud and Auditor Deception provides one hour of CPE credit in fraud prevention, detection, or reporting, which counts toward the four hour fraud CPE requirement imposed by the California Board of Accountancy (http://www.dca.ca.gov/cba) on CPAs subject to the accounting and auditing, governmental auditing, or preparation engagement CE requirement.

Description:

This course is based on two recent financial statement fraud cases; Dewey & LeBouef and ContinuityX. Dewey & LeBouef was a high-profile law firm that, at its peak, had over 3,000 employees and over 1,400 lawyers. It is alleged that personnel at Dewey & LeBouef made inappropriate financial adjustments starting in 2008 to meet its bank lending covenants and planned to conceal these adjustments from its “clueless auditor”. Dewey & LeBouef declared bankruptcy in 2012.
ContinuityX was an internet services reseller that, according to an SEC complaint, fabricated 99% of its revenue. It was audited by a firm that was fined and disciplined by the SEC and the partner responsible for the audit was also fined and permanently suspended from practicing before the SEC. ContinuityX declared bankruptcy in 2013.
Both cases involve financial statement fraud, auditor deception and some lessons to be learned.

Please Note: These Fraud CPE credits satisfy the California Board of Accountancy (CBA) fraud requirement.

Usage Rank:

25313

Release:

2018

Version:

1.0

Prerequisites:

None.

Experience Level:

Overview

Additional Contents:

Complete, no additional material needed.

Additional Links:

Advance Preparation:

None.

Delivery Method:

QAS Self Study

Intended Participants:

Anyone needing Continuing Professional Education (CPE).

Revision Date:

21-Jul-2025

NASBA Course Declaration:

Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.

Keywords:

Crossing the Line - Cases in Financial Statement Fraud and Auditor Deception - CPE course for CPAs

Learning Objectives:

Course Learning Objectives

Upon completion of this course, you should be able to:
  • Recognize the primary elements of financial statement fraud in the Dewy & LeBouef and ContinuityX cases
  • Associate the primary elements of financial statement fraud in the cases in this course with audit procedures that may have detected the fraud

Course Contents:

Chapter 1 - Crossing the Line - Cases in Financial Statement Fraud and Auditor Deception

Course Overview

Dewey & LeBouef

Background

Principle Administrative Personnel at Dewey & LeBouef

Financial Statement Fraud in 2008

2008 Adjustments

Damaging Emails

Financial Statement Fraud in 2009

2009 Adjustments

More Damaging Emails

Reduction in Covenant

The $150 Million Bond Offering

Collapse of Dewey & LeBouef

The Auditor

Criminal Charges and the Outcome

Discussion of the Dewey & LeBouef Case

The Motivation Behind the Adjustments

How was the Auditor Deceived?

Lessons Learned

ContinuityX

Background

Principle Personnel

Alleged Financial Statement Fraud

The Scheme is Exposed

Source of Funding

The Auditor

The Outcome

Discussion of the ContinuityX Case

The Motivation

Lessons Learned

Chapter 1 Review Questions

Glossary

Click to go to: CPA Fraud CPE Courses | Forensic Accounting CPE Courses
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