Forensic Analytics and Management Accountants
This Statement on Management Accounting (SMA) summarizes recent fraud cases perpetrated by management and employees and suggests the use of management accounting tools and techniques that may aid in early detection of these schemes.
Management accountants possess unique skill sets that include a knack for data analysis as well as a broader business perspective than financial accountants. Management accountants are not limited to internal financial data but rather synthesize the entire organizational performance from financial, operational, efficiency, and effectiveness measures and blend those with macroeconomic data.
- This is the first SMA to address the risk of fraud and how management accounting techniques can be adapted to direct attention to anomalies caused by fraud.
- Though management accounting techniques and tools were not intended to be used in forensic accounting tasks, use of some of these techniques can direct management’s attention to suspicious transactions or events. Three common management accounting techniques—contribution margin analysis, budgeting, and variance analysis—can be used to prevent or detect employee frauds.