Students Receive Award for Forensic Accounting Case Study

Monday, October 29, 2007

Recent scandals in the news have focused public attention on corporate fraud. For the first time in nearly 20 years, the American Institute of Certified Public Accountants has called for more emphasis on fraud education, recommending the development of fraud-related course materials and cases for students to explore the field of forensic accounting.

A fast-growing field, forensic accounting uses accounting practices to handle legal issues once they arise or before they become a major problem for a company. Today, many accounting firms have departments dedicated to forensic accounting.

Two Saint Joseph's University accounting students, Andrew Hadley '08, and Alexander Raymond '08, teamed up with Joseph Ragan, Ph.D., chair of accounting, to develop a fraud-based case.

Hadley and Raymond's paper, "Star Electronics, Inc.: An Excel-based Audit Case Using Financial Statement Analysis to Detect Fraud," won the Best Paper Award at the International Business and Economics Research Conference in Las Vegas earlier this month.

The paper has also been accepted for publication in the Journal of Business Case Studies for the spring 2008 issue.

For this case, Hadley, Raymond and Ragan created accounting data for a fictitious company, United Electronics, which is set to merge with Star Electronics, Inc. Students act as forensic accountants, performing a comprehensive analysis of United Electronics' financial statements before Star Electronics' board of trustees approves the takeover.

"Constructing this case enabled us to study a new and exciting field of accounting in more depth," said Hadley. "It was the perfect complement to my accounting education."

Courses in forensic accounting have become integral to the curriculum in SJU's department of accounting. This interactive computer-based case can be used on both the graduate and undergraduate level.

Hadley and Raymond are both members of the STAR Scholars program, which provides distinguished accounting students with high-level accounting technology applications. Hadley is a STAR managing partner and Raymond is a technical managing partner. Both students are members of the Accounting Society and National Society of Collegiate Scholars.

--David King '08

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