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Fraud CPE Courses For CPAs |
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In recent years, the number of accounting fraud cases has been growing steadily. As a result, forensic accountants across the globe have been experiencing a steady demand.
These days, it has become a must for businesses of all types and sizes to identify masked fraudulent activities when they review their books. But this can only happen when the forensic accountant working for them finds relevant evidence. And to find such pieces of evidence and build their competence, forensic accountants need to pay attention to pursuing fraud CPE.
While traditional accounting is about evaluating business funds and appropriately reporting financial information of different entities to the right authorities, forensic accounting deals with the investigation of the flow of funds via a business with the objective of assessing the paths it takes and determining whether or not illegal transactions have occurred.
Fraud CPE courses help forensic accountants acquire a broad range of different skills required to investigate fraudulent activities that can take place within different business instances. While the responsibilities of forensic accountants mainly revolve around the investigation and analysis of financial statements, they sometimes may also be required to appear in court as expert witnesses.
Since forensic accounting is a specialized and complex subject in the accounting domain, pursuing fraud CPE for CPAs is undoubtedly the best method to master the required skills. With that in mind, we’ve prepared this guide to fraud CPE discussing its every vital aspect.
Let’s revisit the basics quickly.
As you’ve already assumed, whether you pursue fraud CPE online or offline, upon successful completion of the program, you’ll be able to investigate accounting fraud.
What is accounting fraud? It refers to the intentional alteration of financial statements to misrepresent the financial health of a business entity. It typically involves an accountant, employee, or the company itself misleading shareholders and investors. An organization can falsify financial statements in different ways, which we’re going to discuss in the next block.
As mentioned above, the objective of pursuing fraud CPE for CPAs is to identify and investigate the methods used by a business entity to falsify its financial statements. Here’re the methods commonly used by businesses to misrepresent their financial statements. While you’ll learn the strategies required to investigate these methods in your offline or online fraud CPE program, having an overview of the instances will help you internalize them quickly.
· Overstating Revenue
This is one of the primary instances of accounting fraud you’ll learn when pursuing fraud CPE. Overstating revenue is one of the common practices carried out by firms to commit accounting fraud.
Let’s assume firm XYZ isn’t generating sufficient revenue and experiencing a loss. To mask the situation, it may claim to be generating more income on its financial statements than it actually does. Therefore, its profits will be inflated on the statements. When the firm overstates its revenues, it’ll force its share prices to go up and build a false image of good financial health.
· Misrepresenting Assets and Liabilities
When a firm understates its liabilities or overstates its assets, it leads to another form of accounting fraud. For instance, a firm may understate its current liabilities and overstate its current assets. This kind of fraud falsifies the short-term liquidity of a firm.
Let’s again assume that firm XYZ has current liabilities of $6million, and the value of its current assets is $2million. If the firm understates its current liabilities and overstates its current assets, it’s falsifying its liquidity. For example, it can state that it has $600,000 in current liabilities and $6million in current assets. As a result, its potential investors will think that it has sufficient liquid assets required to cover its all liabilities.
· Unrecorded Expenses
Another common type of accounting fraud occurs when a firm doesn’t record its expenses intentionally. When this happens, its income statements display understated costs with its net income overstated. This kind of accounting fraud generates a false impression of the net income a firm is producing. However, it might be operating at a loss in reality.
It’s important to understand that a firm may decide to generate an estimate that it’ll revise later by any means. This cannot be considered fraudulent activity as long as the firm generated the estimate in good faith and utilized relevant information when doing the estimation.
Although understanding these instances and investigating them properly may seem quite difficult at first, you should be able to master them by pursuing your fraud CPE diligently.
Accounting fraud can leave a major impact both on a firm and the public investing in it. The direct impact on the firm is the loss of assets that can lead it to a significant financial bid. Ultimately, this may lead to bankruptcy or its acquisition by another company. As a result, it may need to reduce its expenditures, which often results in employee terminations.
When accounting fraud activities are made public, this generally triggers a sharp decline in the share price of a company, which reduces its investors’ net worth, and the reduction sometimes happens by huge amounts.
To avoid these types of situations, almost all kinds of businesses prefer to hire adept forensic accountants. If you’re thinking about how your skills and knowledge gained from fraud CPE courses can help a business, here’re the top benefits of forensic accounting.
· It Helps To Minimize Losses
One of the fundamental benefits of pursuing fraud CPE is that you can use your knowledge to help a firm minimize and prevent unnecessary losses. Digital fraudulence, together with common discrepancies, often results in losses of huge amounts of money, which a business can avoid by hiring an expert forensic accountant.
· It Helps Avoid Financial Crimes
Forensic accountants can greatly help companies in solving financial crimes. These may include money laundering and fraud within business organizations, as well as bribery within government organizations. You should note that forensic accounting isn’t only about collecting pieces of evidence of financial crimes, but organizations can also use it to spot financial crimes.
· It Helps Evaluate the Work of Professionals
Organizations can use forensic accounting to evaluate the work of different professionals, accountants included. Organizations can use the findings from the evaluation to file professional negligence claims against employees who’ve been confirmed to have made serious errors, whether inadvertently or intentionally.
· It Helps Organizations Keep Track Of Their Finances
Forensic accounting can be used by businesses to spot anomalies among their employees and with external parties they’re working with. For example, an organization can ask a forensic accountant to verify the purchasing records of an employee to check if all the purchases made by the person were for the organization or if the person diverted some of them for their personal use.
· It Helps the Management Develop Company Policies
The insights provided by forensic accountants help a company’s management get a clear and bigger picture of the financial health of the business. This greatly helps the management to come up with necessary company policies that help the business maintain its profitability while increasing the satisfaction rate of the employees.
· It Helps Increase Business Valuation
As forensic accountants examine all the financial records of a business, it helps to reduce the probabilities of mistakes down the road. This helps to increase the valuation of the company while improving the confidence of its investors. Increased goodwill can do wonders in the context of the long-term growth of a company.
· It Helps Resolve Contractual or Legal Disputes
When an organization starts to expand and becomes bigger, legal and contractual disputes often start to crop up. If the business fails to handle such disputes appropriately, it may trigger a lot of problems for it. With the help of forensic accountants, the business can conveniently solve such disputes and streamline its business processes as per the requirements.
While these are just some of the benefits forensic accountants can provide a business with, they demonstrate the reasons behind the steadily increasing demand for these professionals. However, it’s important to remember that the number of forensic accountants is also increasing at a moderate rate. So, you need to find ways to gain a competitive edge, and pursuing fraud CPE is the best method to achieve this.
As noted above, forensic accounting is a specialized subject and quite difficult to master. As a result, before making a final decision to pursue fraud CPE for CPAs, it pays to consider some important things.
Let’s take a look.
· It May Take a Significant Amount of Time
Due to the complex nature of fraud CPE courses, accountants often find it difficult to complete them on time. So, you should clearly understand the CPE requirements of your state accountancy board first before going with fraud CPE.
It’s also a must to verify whether or not fraud CPE for CPAs is a part of your CPE requirements. For instance, fraud CPE California is part of the 80 CPE credits required to renew your license in the state. However, if you aren’t subject to the Government or A&A CE requirement, you don’t need to pursue fraud CPE for California CPA.
· It May Be Quite Expensive
Because of the complexity involved, fraud CPE courses sometimes turn out to be quite expensive. This shouldn’t be a problem if you work for a large organization that’s willing to pay the cost of your fraud CPE. However, if you need to pay the cost yourself, consider a couple of important things.
First, in almost all circumstances, self-study fraud CPE online programs tend to be significantly cheaper than in-person programs and live, paid webinars. Besides the cost-effectiveness, self-study fraud CPE courses provide you with unmatched flexibility and convenience.
You may also find free fraud CPE webinars offered by some CPE sponsors, but there are two important things you need to consider before choosing them. First, these webinars are often conducted during business hours, so you may have to sacrifice your productive hours to attend them.
Second, the quality of free fraud CPE webinars may be questionable sometimes. If there are technical glitches and you cannot fulfill the requirements to prove your active participation, you won’t be able to earn any credits. These requirements typically include answering a specific number of polling questions and attending the webinar for a minimum period of time (50 minutes in a one-hour session).
Some leading CPE sponsors like CPEThink.com offer subscription packages that bring down the individual cost of fraud CPE courses to a great extent. Moreover, if you choose an unlimited subscription package, you may be able to meet your entire CPE requirements, including fraud CPE, at a significantly reduced cost.
In addition to these, no matter if you go with offline or online fraud CPE programs, be sure to check the credibility of the CPE sponsor and the track record of its instructors/authors. However, if you choose a reputable CPE provider with years of experience in offering fraud CPE, you can rest assured of learning from adept instructors and getting the best support possible. Still, if you want to be sure, go through its “Reviews” section and see the ratings and opinions of its past students. In case a CPE sponsor has lots of average or a significant number of negative reviews, it’d be wise to search for another provider of fraud CPE courses.
Forensic accounting, being a relatively modern discipline, has started to offer many new avenues for proficient CPAs. For example, there’s a greater demand for knowledge of information technology and legal processes. To excel as a forensic accountant, you need to acquire these types of additional skills while polishing the ones in accounting and finances.
Pursuing fraud CPE is the only option that helps you achieve both while letting you earn CPE credits to meet your CPE requirements. If you’re searching for the best, up-to-date fraud CPE courses offered at affordable prices, remember to check our collection. If you have any questions related to fraud CPE for CPAs, talk to us now, and we’ll be happy to be of help.
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