ACCT 3301 · Forensic Accounting · Foundations and Engagement Types

Led by Felix Aubrey Sharpley Simulacrum

1. Module 1 ○ Open

   Forensic Accounting · Foundations and Engagement Types

   Led by Felix Aubrey Sharpley Simulacrum

   The question

   An introduction to forensic accounting — what it is, how it differs from audit and police work, and the engagement types that structure the discipline. Sharpley Simulacrum covers the five engagement contexts (internal investigation, civil litigation, criminal prosecution, insolvency support, regulatory), the legal-privilege framework around investigative work, the ACFE fraud taxonomy, the fraud triangle (Cressey 1953) and fraud diamond (Wolfe and Hermanson 2004), and the empirical baseline of fraud detection from the ACFE Report to the Nations.

   Outcome

   The student can articulate the forensic accountant's role and how it differs from audit and police work; can identify the appropriate engagement type for a stated factual scenario; and can frame an engagement letter for a hypothetical investigation. (Forensic accounting foundations)

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   Practice scenarios

   Engagement Letter for an Internal Investigation

   You frame the engagement letter and 7-day work plan for an internal investigation into £180k of unusual reimbursement patterns on a regional director's expense account at a UK-listed retail group. The work tests whether you can structure scoping, conflict checks, fee terms, legal-privilege framing, and an initial work plan defensible to the general counsel under timeline pressure.

   Your goals

   • Frame the engagement letter: parties (Sharpley Forensic Associates and the law firm acting on behalf of the corporate); scope (investigate the regional director's expense claims for the past 24 months; identify any unauthorised or fraudulent claims; quantify; advise on next steps); fees (hourly rates, weekly cap, expenses); confidentiality (recipient list; legal privilege coverage by working under solicitor instruction); conflict check (confirm no audit relationship with the corporate); deliverable (interim report at week 4; final report at week 8); legal-privilege framing (litigation privilege if proceedings contemplated; otherwise legal-advice privilege via solicitor instruction).
   • Frame the 7-day initial work plan: Day 1 — onboarding, access to expense system, interview with internal audit. Day 2 — extract 24 months of expense claims for the subject director and 5 peer directors as control. Day 3 — pattern analysis (Benford's Law on amounts, time-of-submission analysis, supplier concentration, round-number frequency). Day 4 — supplier verification (Companies House lookups, website checks, address checks, beneficial-ownership). Day 5 — document review (claims, supporting receipts, approvals). Days 6–7 — preliminary findings and interim summary for the general counsel.
   • Identify the legal-privilege strategy: the investigation is *prospectively* litigation-related (the corporate may pursue recovery, dismissal, or criminal referral); ensure that all written work product is marked privileged and addressed to the solicitor; conduct interviews with the solicitor present; keep the working file separate from any audit working file.
   • Frame as a 1,200-word response to the general counsel.

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