LSU professor makes a name as a forensic accountant
Heitman, 2/17/2002, p. 1-H
last year's Sept. 11 terrorist attacks, The Christian Science Monitor
called LSU accounting professor Larry Crumbley to get his insights.
staff photo by Bill Feig
accounting professor Larry Crumbley is also a forensic accountant
-- an accountant who can use investigative skills in law enforcement
or as an expert witness in court cases.
The Monitor wanted to know how much success investigators could
expect in tracking the terrorists' money.
is a certified forensic accountant -- an accountant with special
training in conducting financial investigations for law enforcement
and civil court cases. He's also the editor of the Journal of Forensic
Accounting, which he founded a couple of years ago, and he's written
novels with forensic accountants as the main character.
of the Sept. 11 terrorists used debit cards, Crumbley told The Monitor.
"If those cards were set up by cash brought into the country, it
would be largely untraceable," he said in a Monitor interview published
on Sept. 26.
when your forensic accountant has to start doing some walking,"
Crumbley recently told The Advocate. "A forensic accountant has
to do a lot of interviewing."
fall of Enron is another major news event that promises to give
forensic accountants a higher profile. The rapid collapse of the
Houston-based energy company has spawned numerous allegations of
financial mismanagement and possible criminal activity.
might have been wise if some of those people who were working for
Enron had a forensic background," said Crumbley. "Then, maybe those
people wouldn't have lost all their money."
most people hear the word "forensic," they think of a coroner --
an association that can be helpful in understanding what forensic
accountants do, Crumbley said.
compared forensic accounting to "Quincy," a once-popular TV show
about a crime-solving coroner. "You remember Quincy? He worked on
bodies. Well, we work on books," Crumbley said. "We don't assume
that the books are correct. The books could be cooked. The records
could be false. We have to look behind the records."
addition to probing financial records, forensic accountants also
look for suspicious behavioral clues in conducting investigations,
Crumbley said. A lavish lifestyle, for example, could indicate that
the manager or owner of a business is skimming money from the corporate
also become suspicious of someone who won't take a vacation," Crumbley
said. When a financial manager won't take time off, that could mean
an unwillingness to risk some unpleasant revelations while he's
away, said Crumbley.
cited the case of a business owner who always gave his unopened
envelope of canceled checks directly to his assistant. When the
assistant went on vacation, he opened a stack of canceled checks
himself and made a startling discovery. The assistant had been writing
the names of vendors in invisible ink on some of the checks. After
the ink vanished, she would place her own name on the checks, then
cash them for her own use.
he had just done one thing, if he had just opened one envelope before
giving it to her, then it couldn't have happened," Crumbley said.
forensic accounting has particular relevance to today's headlines,
its techniques originated at the dawn of civilization.
scribes of ancient Egypt who inventoried the pharaoh's grain, gold
and other assets were probably the accountant's predecessors," Crumbley
told The Forensic Examiner trade journal last year. "But forensic
accounting, or at least accounting expert witnessing, can be found
in an 1817 court decision in England."
are two primary types of forensic examiners, Crumbley said. Some
forensic examiners work in law enforcement agencies and help conduct
World War II, for example, the FBI employed more than 500 agents
who were accountants. Earlier in its history, the FBI used accountants
to convict mobster Al Capone for tax evasion.
second kind of forensic examiner offers expert testimony in court
cases dealing with financial disputes. Crumbley's work in the field
has involved this kind of forensic accounting -- a specialty he
calls "litigation support."
many court cases connected to financial controversies, both the
plaintiff and defendant hire forensic examiners to support their
claims, Crumbley said.
like testifying in court," said Crumbley. "Testifying in the courtroom
is a lot like the knights jousting in medieval times."
vivid imagination has inspired a number of unconventional methods
for explaining forensic accounting to students and the general public.
He's worn a fedora and trench coat to class to remind students that
a forensic accountant is a kind of detective. He readily dons his
detective costume for publicity pictures, and he's also written
novels, such as "The Ultimate Rip-off," in which the hero is a forensic
have to be detectives," Crumbley said. "Accounting can be fun. Other
people may consider me a ham. Yes, you could probably say I'm a
ham. I guess I'm a maverick. I guess I'm a Renaissance man. I like
that term a little better."
said he writes novels about forensic accounting because people tend
to learn better about a subject when it unfolds in the form of a
story. "Hopefully, I've made forensic accountants popular, because
the main characters in my novels are forensic accountants," he said.
are often lampooned as boring because their work involves grueling
detail, said Crumbley.
tedious. It's very difficult," he said. "You have to be able to
grasp difficult concepts. A forensic accountant is like someone
eating a bowl of spaghetti. When you start pulling at each strand
of spaghetti, you don't know where it will lead, and you have to
follow it. Being a forensic accountant is like eating a bowl of
spaghetti one strand at a time."
also endure a reputation for blandness because they tend to live
conservatively, said Crumbley, whose own lifestyle seems aimed at
breaking that mold.
61-year-old professor has traveled to 95 countries, bungee jumped,
dived with sharks off the coast of Florida and auditioned unsuccessfully
for "Survivor," a hit CBS show in which contestants play survival
games in exotic locales.
have only three goals left in my life," Crumbley said.
1, I'd like to go to the moon. That's not going to happen. I'm too
2, I'd like to be in the Century Club. That's a group of people
who have traveled to at least 100 countries. I've been to 95 already.
3, I'd like to be a guest on 'The David Letterman Show.' The only
way I could do that is to get on 'Survivor,' because Letterman interviews
all of the 'Survivor' contestants.
they're not going to pick me for 'Survivor,'" Crumbley said. "I'm
too old, and I'm not good-looking. It's age discrimination."
even when they don't end up on "Survivor," accountants face significant
risks, Crumbley said. When firms such as Enron crash, plaintiffs
are more likely to sue the company's accounting firm rather than
the company itself. That's because the accounting firm has deeper
pockets than the bankrupt corporation, he said.
people don't realize is that it's very dangerous to be an accountant,"
Crumbley said. "Juries generally believe that accountants did something
wrong, whether they did it or not."
shield themselves from liability, many major accounting firms are
hiring their own forensic accountants to spot possible problems
in clients' corporate ledgers before they reach the crisis stage.
the meantime, as the Enron case makes its way to the courts, Crumbley
is willing to make at least one confident prediction.
sides," said Crumbley, "will have their own forensic accountants."