Other Financial Records

by

Alan R. Graham
Senior Investigative Auditor
U.S. Treasury Department
Bureau of Alcohol, Tobacco, and Firearms

Accountant's/Bookkeeper's Records- Accountants/bookkeepers are typically hired to maintain the company's books (journals and ledgers) and to prepare financial statements that reflect its profitability, solvency, and cash flow. Other records that may be found at the office of the accountant/bookkeepers include contract files, correspondence files, corporate minutes, tax returns, cancelled checks, bank statements, invoices, and other source documents. The partnership agreement or corporate charter would identify the owners of the business. Depreciation schedules list the company's fixed assets, and can be compared to assets claimed on the proof of loss statement. Perpetual inventory reports and reports of physical inventory counts can be used to plot sales trends, and can also indicate problems with inventory, such as obsolescence or overstocking. These types of records can generate many useful leads when analyzed by a forensic accountant.

Suppliers of Goods & Services Records- Suppliers provide multiple sources of financial information for the investigative team. The following pertinent areas provide specific sources for further analysis.

Sales Invoice: A document that provides details as to the sales transactions between the parties. The invoice will show the amount of the sale, items sold, terms of sale, etc. These are excellent source documents which provide the investigative teams with trend analysis.

Accounts Receivable: Details the supplier's financial records, which indicates purchases made from each supplier. The supplier's accounts receivable depicts specific sales, payment history, and outstanding balances. Cash-on-delivery (C.O.D.) sales would not be shown in the accounts receivable ledger but may indicate financial difficulties.

Forms of payment: depict the method of payments to suppliers in the form of cash (possibly C.O.D.), check, certified check or credit card.

Correspondence File: contain letters, documents, TRW reports, etc., between the parties. These files may provide documentation such as placing a customer on C.O.D. basis.

reprinted by permission