Ep. 198: Leah Wietholter – Following the money with a forensic accountant

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Workman Forensics


Full Episode Transcript
Adam:



Welcome to Count Me In, the podcast that explores the world of
business from a management accountants perspective. My cohost
Rouba Zeidan spoke with our special guest Leah Wietholter. Leah
is a certified fraud examiner and the author of the new book Data
Sleuth: Using Data in Forensic Accounting Engagements and Fraud
Investigations. Leah began her career supporting forensic
accountants at the FBI and has since branched out to lead her own
forensic accounting and private investigation firm. Forensic
investigations are the center of so many great crime shows these
days, and it was exciting to hear how accountants expose fraud
and other problems lurking in bank accounts, credit card
statements, and payroll reports. I hope you enjoy the
conversation.


Rouba:



Good morning, Leah. And thank you so much for joining us.


Leah:



Thank you so much for having me.


Rouba:



I'm really looking forward to learning more about your very kind
of interesting arena and industry, which is and you have a
wonderful background in the FBI. So maybe you can drop in some
examples on that part of it. So can you tell us a little bit
about forensic accounting and forensic accounting engagement?
What does it entail?


Leah:



Yeah, so I work forensic accounting engagements as a private
consultant. So I'm not affiliated with law enforcement or
anything like that. I own a forensic accounting practice in
Oklahoma, and the majority of our engagements are solving some
sort of financial problem that's either in litigation or could
end up in litigation. So we work a lot of embezzlement
investigations or fraud investigations. Then we also work to help
sort through partnership dispute or a shareholder dispute, so if
someone believes the general partner or whoever's managing the
money, usually, has been taking more than their fair share, we
get involved there and kind of our third other largest category
of a forensic accounting engagement is in divorce matters when
the two parties are looking to get divorced and they need to
split their assets. Then usually one party is not familiar with
how the marital funds were handled.


Leah:



And so they wanna make sure that when they go to divide those
assets, that they're getting their fair share. So we help them
either get comfortable with the known assets or try to find any
other hidden assets within that situation. And we usually only
work divorce cases. If there's a business involved, there's a lot
of opportunities when people have closely held businesses where
they can hide assets or just, they own things that maybe their
spouse doesn't know about. So those are kind of the three types
of engagements that fall under the three types of cases that are
typically involved in a forensic accounting engagement for us.


Rouba:



Interesting. I mean, that, that kind of implies that there are
numerous kind of legal consequences and circumstances you know,
that might come into the equation and most well known would be
maybe investigating alleged fraudulent activities like you, you
know, in your experience, how prepared is the average finance and
accounting professional to handle such circumstances?


Leah:



I would say that the accounting and financial professionals that
I run into, they're familiar with what fraud looks like. They're
familiar with, you know, the concept of, we talk about this a
lot, cuz we use data analytics, but a lot in our investigations,
but we talk about what should have happened, the framework what
should have happened versus what happened. And so finance and
accounting professionals know what should have happened. And then
they also know what happened, but taking that information and
then putting it in a format that could be explained to a judge or
a jury or even to the client themselves is where our specialty
usually shows up. As opposed to, you know, maybe someone working
in corporate or even in audit connecting those dots. One of the
things that I've been focusing on lately with my team is, okay, I
understand that these journal entries, for example, these journal
entries look strange and we can tell the client, Hey, these
journal entries look strange, but we need to tell them why that
matters.


Leah:



Why should they care about it? And what is the risk to them? What
is the financial loss to them? And being able to connect what we
know about accounting to losses, to the story of what happened,
because that's what helps in, if it does result in litigation,
that's what helps communicate the findings. So we've gotta be
able to connect what we know as financial professionals with a
group of individuals that this is not their specialty. And so
connecting those dots, understanding a lot of times finance and
accounting professionals are very good at understanding what all
the financial statements say and what that means, but then to
translate that into, okay, why should my client care, which is
usually connected to what actual dollars are missing which would
be found on bank statements and credit card statements and
payroll reports. So just knowing where to go for that information
to best communicate what happened. And the corresponding loss is
kind of where this forensic accounting niche comes into play.


Rouba:



Did you find that the need for forensic accounting has grown over
the past few years and more specifically, you know, post the
COVID era? And if so, how and why?


Leah:



So when I first started in forensic, so my background, I worked
for two years with the FBI under the direction of a forensic
accountant. And that's how I got into this niche so early in
life. But then when I joined I started doing this from the
private sector. It wasn't as popular and that would've been like
2009. It, it was becoming more popular. The more that technology
has advanced and the access that we have that keeps growing to
different kinds of data and understanding what that data can tell
us. And you know, how we can use that to understand what's
happening and just to understand and put our arms around those
facts. Then I think forensic accounting is becoming more popular
in the private sector. And I haven't really noticed a huge
increase in the need of forensic accounting.


Leah:



I think a lot of people after COVID, I tell my team, I think
people are just mad at each other. So we have a whole lot more
like the volume of partnership disputes is so much greater than
it was before. We're starting to see an uptick in divorces as
well. So I don't really know that COVID affected how much
forensic accounting or, you know, increased that need. But I have
seen an increase in over the course of the last 12 years or 15
years of my career in that, because there's so much more
information readily available, that it is possible to find out
what happened without relying on law enforcement to get involved
and law enforcement, especially in the US, they already have too
much work as it is. So if people want answers to their questions
and they want it timely, then I think the best resource for them
is a forensic accountant in financial investigations.


Leah:



So that's what I have kind of noticed in, you know, this
basically has consumed my entire career, this field. And so just
noticing the trends that way, you know, and like I said, COVID, I
don't know that it increased the need for forensic accounting.
It's just that there seem to be even more disputes since COVID.
And so then that means that there's a lot more volume for not
just forensic accountants, but I like to ...