Friday, May 15, 2009

"Numbers" in Real Life

Trustee Irving Picard and Securities Investors Protection Corporation (SIPC) President Stephen Harbeck are hard at work attempting to get (at least a degree of) restitution to investors damaged by the Bernie Madoff scandal. Picard and Harbeck have approved $61 million in claims and paid about half of the amount approved. Generally speaking, payments have been $500,000, the maximum allowed by law from SIPC funds. Determining who actually was eligible was a challenge by itself because of the large number of fraudulent documents. Picard and Harbeck have set up a "emergency" pool within the SIPC for retirees and others in the most dire straits. Funding will come from a combination of successful suits against Madoff investors with large payouts and an increase in SIPC fees.

For several years, my wife and I have watched the "Numbers" television show about a math professor in California and the aid he gives to his FBI brother. Although the parties involved here are accountants and attorneys rather than mathematicans and police officers, the concept is very similar. Picard and Harbeck illustrate the potential for a relatively new branch of accounting called "forensic accounting." The process is similar to a financial audit, but with a greater emphasis on detecting fraud or similar criminal activity. Lesley Davidson at APSU actually teaches a course on the topic, which appears to have significant growth potential even in tough economic times like these.


Blogger Monica Lawver said...

I keep waiting for a TV series about a forensic accountant that solves the big mystery, is the hero, etc. When do you suppose we'll get our own CPA version of "Numbers"?

4:30 PM  
Blogger Independent Accountant said...

I am a big fan of Numb3rs too.

1:19 AM  

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