TERRORIST ARE COMMITTING FRAUD IN ORDER TO FUND THEIR ACTIVITIES

"A society that applauds innovation in the world of business can hardly expect to escape innovation in the world of crime." 

- Criminologist, Leon Radzinowicz -

Since the attack of the world trade center in the United States on September, 11 the word terrorist attack has become a big media attraction. Looking and examining the 'modus operandi' of a terrorist attack and their strategy in the attack shows that in performing such act requires them to have access to financial sources. It is possible that now the current trend that terrorist organization may be linked to business organization.

In order to ensure that these business gain maximum return from its transactions enabling the terrorist organization to meet its objectives,  these business may be involve in white-collar crime activities i.e. fraud.  Some might perceive that fraud is not linked to terrorism since white-collar crime issues are more the province of organized crime, but such perception may be misguided. Looking at how terrorists organization operates in its terrorist act ranging in scale and sophisticated from a low-level crime to an organized crime they require financial funds to operate.

Such operation needs a vehicle i.e. companies  to generate accessible funds. These vehicle may be involve in credit card fraud, wire-transfer fraud, mortgage fraud, charitable donation fraud, insurance fraud, identity theft, money laundering, immigration fraud, and tax evasion. These may be some of the common types of fraud transacted to fund terrorist cells.

These vehicle will also be used by the group to receive and distribute illicit funds even though on the surface, these vehicle might engage in legitimate activities in order to establish a positive reputation in the business community.

Thus, financing is required not just to fund specific terrorist operations but to meet the broader organizational costs of developing and maintaining a terrorist organization and to create an enabling environment necessary to sustain their activities.

Extracted from Fraud Magazine Newsletter Association of Certified Fraud

UNDERSTANDING FORENSIC ACCOUNTING

The word forensic known as forensis in Latin means public or forum, and it is define by Merriam-Webster dictionary as follows:

1. Belonging to, used in, or suitable to courts of judicature or to public discussion and debate.
2. Relating to or dealing with the application of scientific knowledge to legal problem.
3. Argumentative; rhetorical.

Whilst accounting can be define as a system of recording and summarizing business and financial transaction that involve analysis, verification and reporting the results through the application of principles and procedures of accounting.

Thus, forensic accounting generally can be understood as the examination of historical or current business and financial transaction in determining the authenticity of the figures, the adoption of the procedures and principles in recording the transaction into the books where any irregularities unveiled is subjected to challenge in the court of law.

Since forensic accounting requires a person to scrutinize financial standing of a business enabling it to be use in the court of law, thus the ability to have an analytical thinking and focus on every detail of the transactions is vital to uncover any irregularities. Hence, the personality of a forensic accountant should be such as a vampire where he is able to detect slightest unusual business transaction.

The knowledge of forensic accounting not only rely on the accounting knowledge per say but it involves the application of legal understanding, finance, business management and human behavior. Through this combination of knowledge a person performing forensic accounting needs to master a special skills in gathering the vital detail i.e. investigation skills.

Having able to think like a criminal is also an added set of skills in order to reveal the truth.