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All organizations must protect themselves against fraud,
misconduct, security breaches and other types of exploitation caused by attackers from both outside and inside the organization.
Data from the past eight years show that these threats continue unabated, and the financial toll is mounting. As a result,
the field of financial forensics represents one of the fastest growing practice areas in the fields of professional accounting
and criminal investigation, and the development of an expanded workforce in the field of information security is one of the
most critical issues facing the United States today.
The challenge to prevent, detect and recover from these activities
is compounded by flaws in technology, lack of awareness about these risks, and misperceptions of external and internal attackers.
The consequences for failing to implement adequate controls are serious, and include direct loss of assets, negative publicity,
and increased exposure to civil litigation. For many organizations – particularly those that deal with telecommunications,
banking and finance, electrical power, oil and gas production and storage, the water supply, transportation, government services,
and emergency services – the risk is serious enough to threaten national security (Critical Foundations: Protecting America’s
Infrastructures, a 1997 report issued by the President’s Commission on Critical Infrastructure Protection). More research
is needed in the areas of financial forensics and information security, and more professionals are needed who are knowledgeable
in such areas as organizational oversight, fraud investigation and examination, business valuation, valuation of damages and
lost profits, litigation support, criminal investigations, business/employee fraud investigations, professional negligence,
and computer and network security.
Financial forensics includes: (1) the use of the tools of the criminal investigator
and financial auditor to uncover criminal activity involving financial and related assets, (2) the gathering financial evidence
for criminal or civil proceedings, (3) evaluating internal controls and assessing fraud risks, and (4) providing oversight
for business and government organizations. Financial forensics experts work as police detectives, law enforcement investigators,
inspectors general, independent and internal auditors, and independent consultants.
Financial forensics has also become
important to the investigation of terrorist organizations. Those who study terrorism are finding that terrorist organizations
are financing their activities through economic crimes, racketeering activities, and money laundering. This nexus between
terrorism, organized crime and white-collar crime has only recently been recognized. The use of financial forensics has become
an essential tool in all investigations of organized crime enterprises, white-collar offenders, and now terrorist organizations.
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