FLORIDA GULF COAST UNIVERSITY



Florida gulf coast University

ACG 6935/4939 – LEGAL AND FINANCIAL

ASPECTS OF FORENSIC ACCOUNTING

SUMMER 2004

Instructor : Carl Pacini, Ph.D., J.D., C.P.A., C.F.S.A.

Guest Instructor: Brett Hood, FBI Special Agent

Address: College of Business-AB#-163

10501 FGCU Blvd. S.

Florida Gulf Coast University

Ft. Myers, Fl. 33965-6565

Phone : (239) 590-7344 (Office)

(239) 590-7367 (Fax)

E-mail : cpacini@fgcu.edu

Course Website:

Classroom: RH 139

Meeting Time: Monday & Wednesday 5 pm to 7:05 pm

Last Day to Withdraw Without Penalty: June 18, 2004

Office Hours: Mondays & Wednesdays 10 am-11:30 am

Final Exam

Date : To be announced

Required

Materials : Criminal Procedure: An Analysis of Cases & Concepts,

4th ed., by Whitebread and Slobogin (soft cover version) and supplement.

Forensic and Investigative Accounting by D. Larry Crumbley, Lester Heitger, and G. Stevenson Smith

Other

Materials : Will be provided by the instructor or made available to

students or will require research by students.

YOU ARE EXPECTED TO READ AND UNDERSTAND THE CONTENTS OF THIS SYLLABUS.

Lexis-Nexis

Access/ABI Inform: Various court cases and other legal materials are assigned reading in this course. Some of these legal materials may be obtained from the Lexis-Nexis Academic Universe database available through the FGCU library.

The FGCU library online collection, including Lexis-Nexis, may be accessed at . If you are off campus, you gain access to Lexis-Nexis.

Once you reach the Lexis-Nexis home page, click on “Site Map.” Once the site map page appears you can select your search choice. If you want to find a court case and you have the cite (e.g., Brinati v. KPMG Peat Marwick, 2 F.3d 183 (7th Cir. 1993), click on “Get a Case” under the heading “Legal Research.” When the “Get a Case” page appears, you can type the case cite (2 F. 3d 183) or the parties’ names into the appropriate box. Once you do this you click on “Search.” Another screen will then appear showing the search results. Click on the appropriate case and you can read, print, save, or e-mail the case.

Lexis-Nexis also permits you to research federal and state statutes, law review articles, legal news, federal and state court cases, federal and state regulations, the Internal Revenue code, various SEC filings, and other materials.

If you have problems using Lexis-Nexis please contact me for help.

Any required legal reading materials that cannot be accessed on Lexis-Nexis or ABI Inform will be provided to you by the instructor via class handout or web access.

Responding to

E-mail: I will check my e-mail often. I will respond to course-

related questions within 24-36 hours unless I am ill, out of town or have a family emergency.

COURSE

DESCRIPTION: This course covers various legal and financial aspects of forensic accounting. Topics covered include the Federal Rules of Evidence, business valuation, computer forensics and cybercrime, cybercrime loss valuation, commercial damages, an overview of federal statutes on fraud, money laundering, identity theft and terrorist financing, introduction to the grand jury, the exclusionary rule, the law of arrest and the law of searches, and asset tracing and asset forfeiture.

COURSE OBJECTIVES:

This course is designed to achieve the following objectives:

1.To give students an appreciation of the scope, extent and importance of legal, accounting and finance concepts and techniques to forensic accounting;

2.To gain an understanding of the significance of the legal system in making decisions and solving forensic accounting problems;

3.To gain an appreciation of the Internet and other databases, such as Lexis-Nexis and ABI Inform;

4.To develop the ability to recognize the potential problems which may arise in a doubtful or complicated situation, and the necessity of working with other experts;

5.To develop research abilities and analytical reasoning skills.

PROGRAM OUTCOMES: This course is designed to help the student achieve the following outcomes:

1.To encourage and promote critical thinking, a skill necessary to succeed today as a forensic accountant. This means each student should be able to comprehend an unfocused set of facts, identify, and if possible, anticipate problems, and find acceptable solutions;

2.To improve the student’s communication skills. Each student should be able to locate, obtain, and organize information from both human and electronic sources. Each student will also learn to defend his or her views through written work.

CORE COMPETENCIES: In addition to the program outcomes noted above, this course promotes the following core competencies:

1.Acquisition of a global perspective by each student to help their future employers (or their own businesses) better compete in international and domestic markets;

2.Development of an ability to formulate decisions that integrate practical, legal and ethical considerations; and

3.Appreciation of the vagaries and uncertainties of real life business situations and the importance of life-long learning.

ATTENDANCE: It is critical that each student attend class to participate effectively in interactive learning. Each student has an unusual opportunity to listen to and interact with a seasoned FBI agent (who is experienced in forensic accounting). Failure to attend class regularly may result in a grade penalty. Excessive absences, in the discretion of the instructor, may result in the loss of a full letter grade (e.g., from B to C). Each student starts the course with 80 attendance points. Each student is allotted two (2) absences with no point loss. Each unexcused absence after the second absence results in a deduction of 8 points from the student’s attendance grade. The instructor reserves the sole discretion to approve or excuse an absence.

GRADING : Each student starts this class with an A. It is your job to

keep it.

Two exams will be given in this course. Each exam will contain objective questions and essays.

Each undergraduate student’s grade will be based on the following:

Exam 1 125 points

Exam 2 125 points

Attendance 80 points

Miniproject #1 50 points

Miniproject #2 50 points

Homework 70 points

Total Points 500 points

The undergraduate grading scale for final grades is:

Grade Total Points

A 460-500

A- 445-459

B+ 435-444

B 415-434

B- 395-414

C+ 385-394

C 350-384

D 300-349

F Below 300

Each graduate student’s grade will be based on the following:

Exam 1 125 points

Exam 2 125 points

Attendance 80 points

Miniproject #1 50 points

Miniproject #2 50 points

Homework 70 points

Research paper 100 points

Total Points 600 points

The graduate grading scale for final grades is:

Grade Total Points

A 552-600

A- 534-551

B+ 522-533

B 498-521

B- 474-497

C+ 462-473

C 420-461

D 360-419

F Below 360

Any grade challenge to a test, homework assignment, project or assignment of any kind must be in writing to be considered. A written grade challenge must clearly describe what is being challenged and provide a rational basis for the challenge.

Make-up exams will not be given without the instructor’s approval. If you miss an exam without a reason approved by the instructor, you may receive a “0”. The instructor’s discretion is final. If you hand in a homework assignment late, you may have points deducted from your grade.

Please bear in mind that you are responsible for all material assigned even if it is not covered in a class lecture. You are also responsible for material presented in class that is not covered in one of the textbooks. You are also responsible for any outside reading material assigned by the instructor. Questions on outside reading material may show up on an exam.

MINIPROJECTS: Each student shall complete two small projects. The projects may be done on an individual or team basis. A team may have no more than 3 persons. Project specifics are outlined in the schedule of assignments. The due date for each project shall be announced in class. Each miniproject must be word-processed. Handwritten work will not be accepted.

HOMEWORK ASSIGNMENTS: Each student is responsible for writing answers to the assigned homework problems. Answers will be collected by the instructor. The maximum number of points for any given assignment is 10. You may receive up to 70 points from homework assignments. Points are awarded based on a reasonable effort put forth by the student not on the correctness of answers. All homework assignments are to be word-processed in Word or Word-Perfect. HANDWRITTEN ASSIGNMENTS WILL NOT BE ACCEPTED.

GRADUATE STUDENT

TERM PAPER:

Graduate students must complete a research paper. The project may be done individually or in teams not to exceed 3 people. The project should be on the legal aspects of money laundering, terrorist financing, tax fraud, cyberfraud, or other type of fraud. The paper must contain at least 10 different references (including court cases, statutes, treaties, etc.) with no more than 5 of which may be Internet websites. The research paper should be at least 12 pages of text (double spaced using no more than 12-point font). The due date is July 13, 2004. You may earn 5 bonus points if you turn the completed project in on or before July 6, 2004. Any paper turned in late may lead to the assessment of a penalty in the grade received.

SCHEDULE OF

ASSIGNMENTS:

Unit 1

Forensic and Investigative Accounting

Ch. 1 – Introduction to Forensic and Investigative Accounting (pp. 1-1 to 1-11)

Homework Exercises 2, 12, 19, 20, 24, 25, 26

Unit 2

Federal Rules of Evidence

In addition to the lecture please do the following outside readings:

Carl Pacini, William Hillison, and Steve Thompson. 2003. Forensic accountants and attorney-client privilege. Journal of Forensic Accounting (forthcoming).

Bonita Peterson and D. Barnhill. 2003. Accountants as expert witnesses: A primer on meeting Daubert challenges. Journal of Forensic Accounting IV (December): 113-126.

Mark Gebauer. 2002. The “what” and the “how” of Daubert challenges to expert testimony under the new federal rule of evidence 702. Pennsylvania Bar Association Quarterly (April): 76-85.

Paul Giannelli. 2001. Forensic science expert qualifications: Traps for the unwary. Criminal Law Bulletin: 249-261.

All readings available at under Courses/Supplemental Materials. All articles are password protected. The password is “legal1.”

Homework problems (see addendum to syllabus)

Also, please read the following two cases after you find them on Lexis-Nexis:

Brinati v. KPMG Peat Marwick, 2 F.3d 183 (7th Cir. 1993)

Sanchez v. KPMG Peat Marwick, 1996 U.S. Dist. LEXIS 2773 (D.N.M. 1996).

Unit 3

Miniproject #1 (problem # 17- p.15-42)(due date announced in class)

Forensic and Investigative Accounting

Ch. 15-Business Valuations (pp. 15-1 to 15-39)

Homework Exercises 7, 10, 14, 15, and 16

Please do this outside reading:

Mills, J., L. Bible, and R. Mason. 2002. Defining free cash flow.

The CPA Journal, January (find on ABI-Inform).

Unit 4

Forensic and Investigative Accounting

Ch. 10 – Commercial Damages (pp.10-1 to 10-30)

Homework Exercises 5, 7, 8, 9, 15, 20, 22

Unit 5

Criminal Procedure: An Analysis of Cases & Concepts

Ch. 23 – Intro to the Grand Jury (pp. 584-611)

Homework – Exercises 1-6 in the syllabus addendum.

Unit 6

Criminal Procedure: An Analysis of Cases & Concepts

Ch. 2 – The Exclusionary Rule (pp. 18-46)

Homework – Exercises 1-5 in the syllabus addendum.

EXAM 1 on units 1-6.

UNIT 7

Criminal Procedure: An Analysis of Cases & Concepts

Ch. 3 – The Law of Arrest (pp. 70-103) and

Ch. 6 – Search Incident to a Lawful Arrest (pp. 180-192)

Homework – Exercises 1-4 in the syllabus addendum.

UNIT 8

Criminal Procedure: An Analysis of Cases & Concepts

Ch. 4 – An Introduction to the Law of Searches (pp. 104-143)

Homework – Exercises 1-5 in the syllabus addendum.

MINIPROJECT #2 (analysis of two legal fact patterns handed out in class)

UNIT 9

Forensic and Investigative Accounting

Ch. 12 – Internet Forensics Analysis: Profiling the Cybercriminal

(pp. 12-1 to 12-24)

Homework Exercises 4, 10, 17, 18, 20, 22, 24, 27, 28, 30

UNIT 10

Forensic and Investigative Accounting

Ch. 13 – Cybercrime Management: Legal Issues

(pp. 13-1 to 13-26)

Homework Exercises 1, 2, 8, 10, 12, 15, 17

Unit 11

Overview of Federal Statutes on Fraud, Money Laundering and Terrorist Financing

In addition to the lecture, please do the following readings:

Davis, K. 2003. Legislating against the financing of terrorism: Pitfalls and prospects. Journal of Financial Crime 10 (3): 269-274.

Silets, H.M. and C.VanCleef. 2003. Compliance issues in the wake of the USA Patriot Act. Journal of Financial Crime 10 (4): 392-399.

Cassella, S. 2003. Provisions of the USA Patriot Act relating to asset forfeiture in transnational cases. Journal of Financial Crime 10 (4): 303-308.

The three readings above are available at ruby.fgcu.edu/courses/cpacini under Courses/Supplemental Materials. The password is “legal1.”

Homework – Exercises 1 to 6 in the syllabus addendum.

Unit 12

Forensic and Investigative Accounting

Ch. 14 – Cybercrime Loss Valuations

(pp. 14-1 to 14-20)

Homework Exercises 5, 6, 9, 12

Unit 13

Criminal Procedure: An Analysis of Cases & Concepts

Ch. 15 – Overview of the Privilege Against Self-Incrimination

Homework – Exercises 1 to 4 in the syllabus addendum.

Unit 14

Criminal Procedure: An Analysis of Cases & Concepts

(pp. 899-931)

Homework - Exercises 1-4 in the syllabus addendum.

UNIT 15

Asset Tracing and Forfeiture

In addition to the lecture, please read the following:

Cassella, S. 2002. The recovery of criminal proceeds generated in one nation and found in another. Journal of Financial Crime 9 (3): 268-276.

Barnett, T. 2001. Legal fiction and forfeiture: An historical analysis of the civil asset forfeiture reform act. Duquesne Law Review 40: 77-99.

EXAM 2—on all material covered since the first exam.

ETHICS : Ethics have become an extremely important topic in

today’s environment. An accountant’s only product is his/her service which is measured by his/her integrity and professionalism. It is expected that no academic dishonesty will occur. Cheating on any assignment will be pursued according to the appropriate procedures outlined in the Student Conduct Code. Cheating includes plagiarism on any of the assigned projects.

All students are expected to demonstrate honesty in

their academic pursuits. The university policies regarding issues of honesty can be found under the Student Code of Conduct on page 11, and under Policies and Procedures on pages 18-24 of the Student Guidebook. All students are expected to study this document which outlines their responsibilities and consequences for violations of the policy.

The instructor reserves the right to change the syllabus as the circumstances may warrant.

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