University of New Mexico students in Rutledge Professor of Accounting Richard G. Brody's forensic accounting class came face-to-face with the real world last night thanks to a case study presented by KPMG.
The case is designed to provide an introduction to the forensic accounting process, challenging student teams to analyze evidence as part of an earnings management investigation.
Brody, CPA, CFE, FCPA, who teaches at the University's Anderson School of Management, said the process was very interactive, with KPMG facilitators asking and fielding questions. Students were challenged from the start as there were no obvious answers and they had to work hard to figure out what happened in the case, using their own judgment. Brody said Steven Law and Bruce Bush from KPMG shared a wealth of information based on their first-hand experience and also injected some humor into the task.
"We in academia always talk about preparing students for the real world, and this is a perfect example of the students getting a chance to participate in a realistic situation that they might encounter in their accounting careers", Brody said. "A real world case that is unstructured. This is as close to an actual assignment as possible."
By having KPMG forensic professionals in the classroom, Brody's students learned how to identify and evaluate evidence related to the Forensic Accounting Investigation, performed data analysis, researched legal accounting and accounting concepts related to the investigation, applied professional skepticism in an investigative setting, and collaborated in a team environment. Brody described the experience as on-the-job training, saying that forensic accounting is as much about investigating as it is about accounting.
"There is no book that tells you how to do a forensic investigation", he said. "It is about solving a puzzle or peeling an onion. It takes creativity. When you think of an accountant, you do not typically think of these tasks or perhaps even these specific skills."
As it is early in the semester, students will be able to relate classroom material to what they learned in the investigation.
"We are so fortunate that KPMG is willing to make a commitment like this", Brody said. "This is really going above and beyond for us."
In the past, students in Brody's classes have collaborated with other outside entities, such as the Criminal Investigation Division of the Internal Revenue Service and the Tax Fraud Investigations Division of the New Mexico Taxation & Revenue Department. Brody said his students enjoy this type of practical application as they are actively learning and never bored. With the IRS, students were involved in interviewing informants, foot surveillance, dumpster diving, and even presenting to a judge to get a warrant, with all roles played by IRS agents.