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Small Business Growth: Recording and Analyzing Transactions, Tax, Legal Format Presented by James [Jim] C. Wilson, MBA, CPA, CFE.

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Presentation on theme: "Small Business Growth: Recording and Analyzing Transactions, Tax, Legal Format Presented by James [Jim] C. Wilson, MBA, CPA, CFE."— Presentation transcript:

1 Small Business Growth: Recording and Analyzing Transactions, Tax, Legal Format Presented by James [Jim] C. Wilson, MBA, CPA, CFE

2 It’s okay to have nothing to say, unless you are speaking at the time. Begin where you are. What do you know? Begin where you are. What do you know? Proprietorship? Partnership? Corporation? Limited Liability Company? Proprietorship? Partnership? Corporation? Limited Liability Company? Begin with capital infusion. Begin with capital infusion. Keep immaculate records. Keep all support documents in a file for “audit” purposes. Keep immaculate records. Keep all support documents in a file for “audit” purposes.

3 Understanding financial statements is a must. Understanding financial statements is a must. Balance Sheet: Assets, Liabilities, Equity. Balance Sheet: Assets, Liabilities, Equity. Income Statement: Revenues, Expenses. Income Statement: Revenues, Expenses. Cash Flow: Transactions providing or using cash. Cash Flow: Transactions providing or using cash. General Ledger: All transactions. General Ledger: All transactions.

4 Those who fail to plan, should plan to fail. Cash Disbursements Journal: Checks. Cash Disbursements Journal: Checks. Cash Receipts Journal: Cash Received. Cash Receipts Journal: Cash Received. General Journal: Adjustments to accounts. General Journal: Adjustments to accounts. Chart of Accounts: All accounts used by the entity. Chart of Accounts: All accounts used by the entity. Financial Statement Analysis: How is my company progressing? Financial Statement Analysis: How is my company progressing?

5 Cash Disbursements Journal: Checks. Cash Disbursements Journal: Checks. Cash Receipts Journal: Cash Received. Cash Receipts Journal: Cash Received. General Journal: Adjustments to accounts. General Journal: Adjustments to accounts. Chart of Accounts: All accounts used by the entity. Chart of Accounts: All accounts used by the entity.

6 Balance Sheet

7 The Income Statement

8 Working Capital

9 The Financial Statement: System

10 Cash Flow: The most important commodity in any business is CASH

11 Financial Statement Analysis - Liquidity Ratios 1.Liquidity Ratios are ratios that are derived from the Balance Sheet and measure liquidity of the company. 2. Liquidity is measured on the balance sheet date. [The day that the Balance Sheet was prepared]. 3. These ratios are important because they measure the ability of a company to meet both its short term and long term obligations.

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13 FIRST LIQUIDITY RATIO: The Current Ratio Current Ratio: This ratio is obtained by dividing the ‘Total Current Assets’ of a company by its ‘Total Current Liabilities’. The ratio is regarded as a test of liquidity for a company. It expresses the ‘working capital’ relationship of current assets available to meet the company’s current obligations. The formula: Current Ratio = Total Current Assets/ Total Current Liabilities

14 SECOND LIQUIDITY RATIO: Quick Ratio (Acid Test) Quick Ratio: This ratio is obtained by dividing the 'Total Quick Assets' of a company by its 'Total Current Liabilities'. Sometimes a company could be carrying heavy inventory as part of its current assets, which might be obsolete or slow moving. Thus eliminating inventory from current assets and then computing “quick” ratio, the company is able to test liquidity. The test is designed to measure how quickly CASH can be generated. The ratio is regarded as an acid test of liquidity for a company. It expresses the true 'working capital' relationship of its cash, accounts receivables, prepaid items and notes receivable available to meet the company's current obligations. The formula: Quick Ratio = Total Quick Assets/ Total Current Liabilities Quick Assets = Total Current Assets (minus) Inventory

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16 THIRD LIQUIDITY RATIO: Debt to Equity Debt to Equity Ratio : This ratio is obtained by dividing the ‘Total Liability or Debt ‘ of a company by its ‘Owners Equity [Net Worth’]. The ratio measures how the company is leveraging its debt against the capital employed [contributed or allowed to remain from cumulative earnings] by its owners. If the liabilities exceed the net worth then the creditors have more stake [“RISK”] than the shareowners. If the Net Capital is negative, the creditors actually own the company. The formula: Debt to Equity Ratio = Total Liabilities / Owners Equity or Net Worth

17 Financial Statement Analysis - Efficiency Ratios Efficiency ratios are ratios that are derived from the Balance Sheet and the Income Statement. The ratios utilize one dynamic statement, the income statement and one static statement, the balance sheet. These ratios are important in measuring the efficiency of a company as it: 1.Turns [sells] inventory, 2.Sells its goods and or services, 3.Employs its assets, 4.Collects its accounts receivable, and 5.Pays its payables. It also analyzes the company’s ability to meet both its short term and long term obligations. If the company does not receive timely payments from its customers, how will it pay its creditors/vendors, on a timely basis? You may have perhaps heard the excuses: 'I will pay you when I get paid' or 'My customers have not paid me!' ‘The check is in the mail!’

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19 FIRST EFFICIENCY RATIO: Days Sales Outstanding DSO (Days Sales Outstanding): The Days Sales Outstanding ratio indicates both the average time it takes to collect the receivables and the age, in terms of days, of the company's accounts receivable. The ratio is regarded as a test of Efficiency for a company. The effectiveness with which it converts its receivables into cash. This ratio is of particular importance to credit and collection associates. Best Possible DSO yields insight into delinquencies since it uses only the current portion of receivables. As a measurement, the closer the regular DSO is to the Best Possible DSO, the closer the receivables are to the optimal level. Best Possible DSO requires three pieces of information for calculation: Current Receivables Total credit sales for the period analyzed The Number of days in the period analyzed Best Possible DSO = Current Receivables/Total Credit Sales X Number of Days The formula: Regular DSO = (Total Accounts Receivables/Total Credit Sales) x Number of Days in the period that is being analyzed

20 SECOND EFFICIENCY RATIO: Inventory Turnover Inventory Turnover ratio : This ratio is obtained by dividing the 'Total Cost of Sales' of a company by its 'Total Inventory'. The ratio is regarded as a test of Efficiency and indicates the rapidity of the turnover of merchandise. How many times, during the accounting period, has the company sold all of its inventory? The formula: Inventory Turnover Ratio = Cost of Goods Sold / Inventory

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22 THIRD EFFICIENCY RATIO: Accounts payable to Sales Accounts Payable to Sales (%): This ratio is obtained by dividing the 'Accounts Payable' of a company by its 'Annual Net Sales'. This ratio indicates how much of the company’s suppliers’ money this company uses to fund its Sales. As the ratio becomes higher, it means the company is using its suppliers as a source of cheap financing. The working capital of such companies could be funded by their suppliers. The formula: Accounts Payable to Sales Ratio = [Accounts Payable / Net Sales ] x 100

23 Financial Statement Analysis - Profitability Ratios Profitability Ratios indicate a company’s capacity to generate returns or profits on the Investment that it utilizes in the business. If a business is Liquid and Efficient it should also be Profitable. FIRST PROFITIBILITY RATIO: Return on Sales Return on Sales or Profit Margin (%): The Profit Margin, as a percentage, is calculated to assist management as they determine the company’s ability to operate profitably, even if competition is fierce and adverse conditions like rising costs, falling prices or declining sales occur in the future. The ratio measures the percentage of profits earned per dollar of sales and is a measure of efficiency. The formula: Return on Sales or Profit Margin = (Net Profit / Net Sales) x 100 Analytically, this formula is enhanced by isolation of variable costs vs. fixed costs. Sales less variable costs = contribution margin. Fixed costs divided by contribution margin = break-even sales.

24 SECOND PROFITABILITY RATIO: Return on Assets Return on Assets: The Return on Assets ratio determines a company’s ability to utilize the Assets employed in the company efficiently and effectively to earn the best return, on limited resources. The ratio measures the percentage of profit earned per dollar of Assets employed and is a measure of efficiency with which the company can generate profits on its Assets. The formula: Return on Assets = (Net Profit / Total Assets) x 100 This is sometimes referred to as the “bottom-line” ratio.

25 THIRD PROFITABILITY RATIO: Return on Equity Return on Equity or Net Worth: The Return on Equity ratio measures the ability of the management of the company to generate adequate returns for the capital invested by the owners of a company. Generally a return of 10% would be desirable to provide dividends to owners and have funds for future growth of the company. The formula: Return on Equity or Net Worth = (Net Profit / Net Worth or Owners Equity) x 100 Net Worth or Owners Equity = Total Assets (minus) Total Liabilities

26 Is it possible that this boyish face could have sent many Enron officials to jail? You bet your sweet bippy!! This is my son, Stan, who is the President of NetEvidence, Inc. His most recent engagement (Kroll) sent many Enron officials to jail.

27 Wilson & Wilson, PC, CPA, CFE is a full-service professional network of qualified and certified professionals. Our Services include:  Compilation and review of financial statements in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants, generally accepted in the United States of America;  Preparation of Federal and State taxes for individuals, partnerships, corporations, gift/inheritance, not-for-profits and excise and Tax Defense;  Forensic accounting investigations, Fraud Examinations, Business Valuations, SBA Finance Packages including in-depth Budget Preparation.  Computer forensics, claims analysis and private investigations. Our network includes: Wilson & Wilson, PC, CPA, CFE Compilation/review, tax preparation, small audits of not-for-profit entities, Forensic accounting, Fraud investigations, Business Valuations and Tax Defense NetEvidence, Inc. Computer Forensics, hard drive imaging, Document retrieval Capital Planning Group Certified Financial Planners Terry Page & Associates, LLC Auditing and HUD Reporting

28 What is forensic accounting? Forensic means analysis or investigation of some past event to reconstruct or recast the corpus. Forensic accounting recasts transactions and entries necessary to reconstruct accounting records, which often involves legal matters. Legal matters involve law enforcement, court litigation, legal disputes, and so on. What's required to become a forensic accountant? Most forensic accountants have accounting degrees. Many forensic accounting professionals also obtain professional certification, either the Certified Fraud Examiner or the CPA certification. Do I need specialized education in Forensic Accounting? Yes, specialized education in forensic accounting is important. Normal accounting degree programs do not include any way near the education in forensic accounting that is necessary for practice in the area. Why is Forensic accounting the hottest area of accounting and rated as one of the most secure careers for the future? The United States has shifted toward an information economy. Forensic accounting professionals are experts in ferreting out information.

29 Forensic Accounting. Forensic Accounting Accountants look at the numbers. Forensic accountants look BEHIND the Numbers. If you’re concerned about financial discrepancies and financial fraud, you need more than an accountant. You need a certified forensic accountant/certified fraud examiner who specializes in forensic accounting. If you want to know why your numbers don’t match, call on Wilson & Wilson, PC, CPA, CFE for an in-depth financial investigation. Our network of certified forensic accountants, certified fraud examiners, certified public accountants, investigators and researchers are thoroughly trained and will not only find financial discrepancies—they’ll find out who, what, where, why, when and how—all during the course of our forensic accounting financial investigation. More importantly, we’ll help you put together and implement systems and controls to prevent internal or external fraud from happening again. If you’re concerned about financial discrepancies and financial fraud, you need more than an accountant. You need a certified forensic accountant/certified fraud examiner who specializes in forensic accounting. If you want to know why your numbers don’t match, call on Wilson & Wilson, PC, CPA, CFE for an in-depth financial investigation. Our network of certified forensic accountants, certified fraud examiners, certified public accountants, investigators and researchers are thoroughly trained and will not only find financial discrepancies—they’ll find out who, what, where, why, when and how—all during the course of our forensic accounting financial investigation. More importantly, we’ll help you put together and implement systems and controls to prevent internal or external fraud from happening again.

30 Our CPAs, and CFEs specialize in the following areas: Fraud Detection Expert Witness Testimony Discovery Assistance Damage Computation Claims Analysis Determination of Compliance If you decide to pursue legal recourse, we will be by your side, ready to stand as expert witnesses to testify about the specifics of the crime uncovered during our forensic accounting investigation. We’ll also educate the court as to the nature of forensic accounting and fraud examinations, which shows our credibility in the field of forensic accounting. If you feel that your company/client is, or has been, a victim of financial fraud and you need a certified forensic accountant or CFE, or if you’d like to fraud-proof your/or your client’s business and implement proven safeguards, contact Wilson & Wilson, PC today for a free, no-obligation consultation or We will show you how our certified fraud examiners, forensic accountants, forensic computer investigators and private investigators can get—and keep— your business on sound financial footing.

31 Business Valuations Get What You’re Worth with an In-Depth Business Valuation You’re probably well informed when it comes to the value of your home, car, boat, and other personal assets—but do you know the value of your business? You’re probably well informed when it comes to the value of your home, car, boat, and other personal assets—but do you know the value of your business? Whether you’re facing a new and pending partnership, closure, divorce, death, business sale, or estate planning session, let Wilson & Wilson’s business valuation specialists give you a fair business appraisal. Whether you’re facing a new and pending partnership, closure, divorce, death, business sale, or estate planning session, let Wilson & Wilson’s business valuation specialists give you a fair business appraisal. We’ll combine in-depth research and analysis regarding the economic outlook, competition, and financial status of your business or any individual, and make sure you’re getting full fair market value. We’ll combine in-depth research and analysis regarding the economic outlook, competition, and financial status of your business or any individual, and make sure you’re getting full fair market value.

32 Our business valuation team won’t give you a "best guess" or "rule of thumb" estimate. We realize that informal and inaccurate approaches to business valuation services often lead to undesirable consequences. Instead, our team will provide you with a fair business appraisal through the careful examination of financial and operational data, legal documents, and other relevant information. Our experts bring you a unique combination of business valuation and real-world experience, and handle business valuation services in a professional and credible manner.

33  As lenders, insurers, and the courts rely on expert opinions to support business valuation claims, it’s increasingly important to seek assistance from experienced professionals.  Our experts are skilled at providing precise and comprehensive business valuations acceptable to the people and organizations that can make—or break—your financial future.  Call Wilson & Wilson, PC today for a free, no-obligation business valuation consultation. We will be pleased to tell you more.

34 Evidence Retrieval & Analysis When Evidence Means a Win or Loss Information gathering that produces hard, useable evidence to win your case is not always a simple task. Well-meaning people who don’t know the laws of information gathering and evidence retrieval often mishandle, or acquire evidence illegally. This taints your case—and lets the guilty go free. We at Wilson & Wilson, PC are well versed in the laws of information gathering, forensic evidence and evidence retrieval. We’ll do it right—and you’ll get a fair trial. Suppose you know evidence exists, but you don’t know how to get it. Wilson & Wilson’s forensic evidence specialists are trained to remove obstacles, gather information, and collect evidence within the boundaries set by law. If criminal evidence exists, we’ll pursue legal and just ways to obtain it. Don’t take evidence retrieval and analysis into your own hands. It could mean the destruction of valuable evidence, and the compromise of your investigation. Instead, call Wilson & Wilson, PC today. If evidence exists, our network of professionals will find it, obtain it and analyze it—professionally, thoroughly and discreetly. Information gathering that produces hard, useable evidence to win your case is not always a simple task. Well-meaning people who don’t know the laws of information gathering and evidence retrieval often mishandle, or acquire evidence illegally. This taints your case—and lets the guilty go free. We at Wilson & Wilson, PC are well versed in the laws of information gathering, forensic evidence and evidence retrieval. We’ll do it right—and you’ll get a fair trial. Suppose you know evidence exists, but you don’t know how to get it. Wilson & Wilson’s forensic evidence specialists are trained to remove obstacles, gather information, and collect evidence within the boundaries set by law. If criminal evidence exists, we’ll pursue legal and just ways to obtain it. Don’t take evidence retrieval and analysis into your own hands. It could mean the destruction of valuable evidence, and the compromise of your investigation. Instead, call Wilson & Wilson, PC today. If evidence exists, our network of professionals will find it, obtain it and analyze it—professionally, thoroughly and discreetly.

35 Evidence retrieval, whether forensic or not, may require positioning an operative where the evidence is legally available. Perhaps it means issuing legal orders, compelling the evidence’s release. Or sometimes, it’s as basic as locating discarded information gathering experts will get the evidence you need. Next is evidence analysis, which is probably as important as, or perhaps even more important than, the evidence acquisition itself. In fact, forensic evidence investigative methods often solve the crime. Our forensic evidence specialists know how to cull the smallest, and often most telling, information from highly unlikely sources. It’s not unusual that a miniscule fiber found on a piece of clothing points directly towards the guilty party. We’ll put our forensic evidence experts to work—and they’ll amaze you with their professional evidence retrieval.

36 Claims Investigation Get to the Bottom of Suspicious Insurance Claims As everyone knows, life is extremely unpredictable. Accidents happen, natural disasters strike, and crime often results in significant losses. Insurance companies do their part to help people recover from such events, but what happens when those who claim to be in need take advantage of the system? What happens when someone commits fraud, collecting on losses that never occurred, or worse, occurred intentionally? In short, the insurance company loses money, and the depleted revenue is eventually replaced by its paying customers. As everyone knows, life is extremely unpredictable. Accidents happen, natural disasters strike, and crime often results in significant losses. Insurance companies do their part to help people recover from such events, but what happens when those who claim to be in need take advantage of the system? What happens when someone commits fraud, collecting on losses that never occurred, or worse, occurred intentionally? In short, the insurance company loses money, and the depleted revenue is eventually replaced by its paying customers. Clearly, no insurance company wants to pay for false damages, nor do they want to alienate their customer base with rate hikes. So if a claim (especially one of significant monetary value) raises red flags, a comprehensive claims audit from Wilson & Wilson, PC may be the key to uncovering fraud and stopping scam artists in their tracks. Clearly, no insurance company wants to pay for false damages, nor do they want to alienate their customer base with rate hikes. So if a claim (especially one of significant monetary value) raises red flags, a comprehensive claims audit from Wilson & Wilson, PC may be the key to uncovering fraud and stopping scam artists in their tracks. So what makes a claims audit from Wilson distinct from the rest? The real difference is our experience in forensic accounting, which means we can take your claims investigation to a much higher level when a routine examination just wouldn't get the job done. Our investigative expertise allows us to obtain elusive information that would normally be missed, and our staff of expert forensic accountants provides clients with a level of insight that simply can't be matched. We will delve into records and receipts, conduct interviews of key individuals, perform on-site inspections, review computer documentation... we will go to great lengths to find the truth behind the claim. Bottom line, if you want the facts, Wilson & Wilson, PC [Wilson Investigations, Inc.] is the firm to find them. So what makes a claims audit from Wilson distinct from the rest? The real difference is our experience in forensic accounting, which means we can take your claims investigation to a much higher level when a routine examination just wouldn't get the job done. Our investigative expertise allows us to obtain elusive information that would normally be missed, and our staff of expert forensic accountants provides clients with a level of insight that simply can't be matched. We will delve into records and receipts, conduct interviews of key individuals, perform on-site inspections, review computer documentation... we will go to great lengths to find the truth behind the claim. Bottom line, if you want the facts, Wilson & Wilson, PC [Wilson Investigations, Inc.] is the firm to find them.

37 What will a claims investigation with Wilson do for you? Save time and money When a claim has the potential to cost your company hundreds of thousands, even millions of dollars, investigating any suspicious claim makes good financial sense. The cost of an investigation is greatly eclipsed by the cost of a false claim, and particularly for smaller companies, this can mean a monumental difference. Plus, working with Wilson means that your investigation will be conducted in an efficient, professional manner, allowing you to save precious time. Support your response Conducting an investigation is only half the battle... once you know for sure what is going on, you need to take action. With Wilson, you will not only be provided with a detailed report complete with supporting documentation, you will benefit from having a professional team of expert witnesses at your disposal, as well as the ability to conduct additional investigation as your case takes shape. We will consult with you to determine the best course of action, and work with you to help ensure a favorable outcome. Provide tangible results We recognize that every client is different, with unique needs and concerns. Therefore, each inquiry conducted by our firm is customized to meet your specific requirements, allowing us to focus our claims audit and keep costs down. Our results will directly address your most pressing questions, providing you with useful, timely information that will yield real benefits.

38 Litigation Support Need Litigation Support? Wilson & Wilson, PC brings you a wide variety of litigation support services, from on- the-scene and pre-trial investigation research to concluding analysis and expert testimony. Our litigation support specialists [NetEvidence, Inc. and Wilson Investigations, Inc.] provide the information and advisory services you need to substantiate material allegations, locate and determine motives of witnesses, and analyze exhibits and critical facts. At Wilson & Wilson, PC, we understand that counsel frequently operates under time constraints, and we make ourselves available on short notice. Whether we’re investigating employee theft, embezzlement, fraud, forgery or other illegal internal financial activities, our litigation support services team completes each assignment quickly and carefully, with the highest degree of professionalism and discretion. Wilson & Wilson, PC is your source for top-notch litigation support services. Call or us today and find out how we can serve you.

39 Expert Witness Remove or Secure Reasonable Doubt with an Expert Witness Leading law firms agree: evidence alone does not always win a court case. Sometimes, you need an expert witness to remove doubt from the minds of the jury. Wilson & Wilson’s professional network has expertise in most industries, making us the foremost firm to call for expert witness testimony at your court trials. For example: Professionals from our network regularly serve in many high profile cases where computer-related expert witness testimony is required. [NetEvidence, Inc.] Our Forensic Accountants serve as expert witnesses in calculating losses and explaining discrepancies and various forms of illegal activity. [Wilson & Wilson, PC] The list is much larger than space allows, but no matter what industry you’re in, our expert witness professionals and private investigators (PI) are there to support you with credible expert witness testimony from the beginning of the investigation through resolution. [Wilson Investigations, Inc.] When you’re deciding the strategy of your case, consider how strongly a jury values an expert witness’ testimony. Let Wilson & Wilson, PC help jurors make their decision—in your favor.

40 Computer Crime Cybercrime--The Crime of the 21st Century Solving crimes and uncovering pertinent evidence used to be as easy as obtaining a search warrant and approaching the suspect with a knock on the door. Today however, this process has become a lot more complicated. Today’s criminals use computers to hide evidence, perpetrate crimes and to be much more sophisticated. Now, something as simple as calling to order a pizza is automated to such a degree that just divulging your phone number allows cyber criminals to access to past orders, credit card information and your home address—and commit computer crime. Because it’s so easy for criminals to hide cybercrime evidence and other pertinent information within a computer network, illegal profits are often earmarked to help protect their organization and computer crime evidence, leading criminals to seek out the brightest computer operators that money can buy.

41 Our Computer Crime Division [NetEvidence, Inc.] specializes in : Computer Forensics Hostile Contact Tracing Cyber Evidence Gathering Internet Monitoring Our clients approach us for various reasons. Some suspect employees of stealing information within their systems. Others want to be sure a vindictive ex-employee hasn’t sabotaged the computer system. Still others need a watchdog to be sure their systems are secure. Our Computer Crime Division [NetEvidence, Inc.] often works with Governmental agencies and private corporations that need to obtain evidence hidden on the computer networks of suspected criminals. At Wilson & Wilson, PC, we feel less time should be spent worrying about computer crime so more time can be spent using computers to help grow your business. Give us a call today and let us show you how to protect your most valuable resource and safeguard your future from all elements of cybercrime

42 Computer Forensics Cyber Criminals Can’t Hide Data from a Computer Forensics Specialist Computer forensics involves the gathering, retrieval and evaluation of electronic data to stop or prevent computer fraud, and it’s a job that’s best left to computer forensics investigators. Computer forensics requires knowledge of all aspects of the computer, from the operating system ISA to computer architecture and hardware design. Wilson & Wilson’s forensic computing team will safely extract electronic data from almost any computer system, even if data has been previously destroyed or hidden. The computer forensics field has also worked its way into the legal arena. More and more court cases are being won with the proper submittal of electronic evidence, so it’s imperative that the computer forensics investigator understands the legal issues and imperatives surrounding electronic evidence gathering. The computer fraud experts at NetEvidence, Inc. are fully trained in proper evidence handling and litigation support services. Their broad knowledge of computer systems combined with extensive legal training sets NetEvidence, Inc. apart. Our computer forensics investigators are the best in their field. Our experts have been specially trained in electronic evidence recovery and can be called upon as expert witnesses during litigation. Give Wilson & Wilson, PC a call today to find out how we can help uncover computer fraud, or prevent it from happening to you or your clients.

43 Data Recovery Lose data? Professional Data Recovery Can Get it Back. As if you didn’t have enough to worry about, today’s technology presents your business with as many problems as it does solutions. Computers that work miracles in your day-to-day operations often malfunction—and you lose valuable data. The that makes communicating so simple carries deadly viruses that infect your machines and spread, causing massive data losses throughout your network. Hackers, both inside and outside your company can access your information, manipulate it, steal it and cause huge losses of data. What can you do about it? Turn to NetEvidence, Inc. for hard drive data recovery and other data recovery services. They specialize in professional data recovery, and will restore your data quickly—right when you need it. NetEvidence’s team of data recovery experts knows how to retrieve your lost data from damaged and corrupt storage media including hard-drives, back-up systems, temporary storage units and more. We can also restore individual corrupt files back to their original condition. Wilson & Wilson’s data recovery specialists will retrieve your lost data and return your business operations to normal quickly and efficiently. So the next time an electronic disaster strikes, remember that your solution is just a phone call away.

44 Update on Draft Electronic Discovery Amendments to the Federal Rules of Civil Procedure MAIN ARTICLE On April 12, 2006 the proposed amendments to the Federal Rules of Civil Procedure that address the discovery of electronically stored information were approved without comment by the United States Supreme Court. The new rules and amendments have been transmitted to Congress and will take effect on December 1, 2006, unless Congress enacts legislation to reject, modify, or defer the amendments. (Source: The process to amend the rules began in In late 2004, the Committee on Rules of Practice and Procedure submitted the rules for public comment. On June 15-16, 2005 the Committee approved the package of changes and submitted the new rules and amendments to the Judicial Conference on July 25, 2005 for consideration at its September 2005 session with recommendations that they be approved and transmitted to the Supreme Court.http://www.uscourts.gov/rules/index.html#supreme0406 See Summary of the Newly Proposed Amendments Below BUSINESS TIPS What steps should I take when securing digital evidence? Identify all computers and storage media that may contain evidence including: The suspect's desktop or laptop computer The suspect's account The suspect's secretary's or assistant's computer The suspect's electronic organizer or Personal Digital Assistant (PDA) File Server Content the Suspect has rights to access Back-up tapes containing and files of the suspect Voic messages from the suspect's extension Cell phone address book of the suspect Home computer systems of the suspect Identify third-party accounts such as hotmail, yahoo mail, msn, etc. Quarantine the computers and media Do not permit anyone to use the relevant computers or systems Disconnect the relevant computer from any network Restrict remote access Consider the need for court orders to preserve and secure the evidence on third party computers and storage media

45 On-Site Acquisition Can’t Bring the Computer to Us? We’ll Come to the Computer. Sometimes, computer equipment that needs to undergo a computer forensics investigation can’t be removed from its current location. If your digital evidence can’t be sent to our laboratories for analysis for whatever reason, Wilson & Wilson’s computer forensics team [NetEvidence, Inc.] can conduct digital evidence searches and data recovery services on-site. Perhaps the evidence in question is contained on a server that’s integral to your day- to-day operations. In such cases, our specialists will quickly and efficiently visit the site, and will transfer the information to media that can be investigated in our laboratories. Years of experience ensure that proper procedures are followed, guaranteeing the integrity of the evidence found. Discretion is often a deciding factor when commissioning an on-site investigation of digital materials. As an employer, you may not want your employees to realize that their equipment is being searched for evidence. In such cases, our specialists will conduct their investigation in such a way that the privacy of the investigation is not compromised. Unobtrusive digital data recovery at your place of business can help ensure the protection of your valuable business assets. Call us today.

46 Electronic Risk Control What’s Your Electronic Risk? As a business owner, you may not realize that a corporate owner is liable for any s sent from anywhere within the company. In addition, unchecked employees may send proprietary files through the Internet, or lodge complaints against you as a result of company violations of workplace privacy issues. We at Wilson & Wilson, PC and NetEvidence, Inc. understand electronic risk management and know what’s needed when preserving electronic evidence. Calling on Wilson’s team of computer forensics experts protects your company from past and future electronic risk. Our electronic risk management specialists will develop prevention plans that hold employees responsible for files they transmit digitally. Wilson & Wilson, PC will also work with you to develop policy procedures to reduce your electronic risk from all digital transmittals, including , Internet, and newsgroup usage. Call us today at We will tell you how you can prevent your company from losing intellectual property, and how to preserve electronic evidence to avoid costly lawsuits.

47 Electronic Document Discovery Electronic Evidence Helps Prove Your Case Do you suspect illicit activity in your own organization, or within a related company? Concerned individuals who feel the need for electronic discovery often approach us even without clear parameters as to what the evidence is—or could be. Wilson & Wilson’s computer forensics investigators [NetEvidence, Inc.] regularly perform electronic discovery for documents that may be related to a crime or your case, even if they’ve been deleted. We’ve found that elapsed time doesn’t hinder the recovery of deleted files, at least in the majority of cases. Rest assured that NetEvidence, Inc. will thoroughly investigate any machine, blackberry, TiVo, thumb drive--whatever, including swap and temporary files, as part of an electronic evidence discovery that gives you the pertinent information you need for your case. If electronic evidence exists, our electronic evidence discovery experts will find it. And, our practice of elaborate planning and our firm adherence to procedure ensures that any evidence retrieved through electronic discovery is admissible in a court of law. We work with integrity, and are proud of the fact that a professional quality computer forensics investigation by Wilson & Wilson, PC [NetEvidence, Inc.] leaves no electronic stone left unturned.

48 Litigation Support Get the Computer Evidence You Need Are you faced with the unpleasant reality of taking legal action towards another individual or company? And does the litigation involve securing documents from your opponent’s computer, as ordered by a court of law? Wilson & Wilson’s team of computer forensics experts [NetEvidence, Inc.] provides professional and discreet computer litigation support. We’ll secure the information you need as quickly and as efficiently as possible. And by using time- tested procedures related to computer litigation support, we make sure the evidence secured is admissible in court, and that it maintains its integrity throughout the custody process. Wilson & Wilson, PC [NetEvidence, Inc.] has provided invaluable computer litigation support for a wide variety of cases, from those of Fortune 500 companies to individual citizens involved in private litigation. If you need computer litigation support, call on our network of professionals today

49 Expert Witness Testimony Do You Need a Computer Expert Witness? In litigation, it’s increasingly probable that digital evidence will be an integral part of your legal arguments. The need to present digital proof of file transfers, the existence of incriminating s, Internet use, etc. has moved into our worlds and our courtrooms. Unfortunately, presentation of elaborate spreadsheets, financial documents, or other digital evidence to a jury often has little or no effect, depending upon that particular jury’s understanding of the information presented. Wilson & Wilson, PC [NetEvidence, Inc.] can provide computer expert witness testimony in any case concerning digital evidence. Our computer forensics experts can clarify the nature of the evidence presented, and justify its pertinence to the proceedings. In our experience, it’s often the case that an intelligent computer expert witness’ discussion of digital evidence on the stand clarifies and answers questions that linger in the jurors’ minds—and makes the difference between a guilty and not- guilty verdict.

50 Who needs Forensic Accountants? Forensic Accountants work in most major accounting firms and are needed for investigating mergers and acquisitions, and in tax investigations, economic crime investigations, all kinds of civil litigation support, specialized audits, and even in terrorist investigations. Forensic Accountants work throughout the business world, in public accounting, corporations, and in all branches of government (from the FBI and CIA to the offices of the local authorities). Forensic Accounting firms are everywhere. In short, forensic accounting requires the most important quality a person can possess: the ability to think. Far from being an ability that is specific to success in any particular field, developing the ability to think enhances a person’s chances of success in life, thus increasing a person’s worth in today’s society. Forensic accountants command a higher salary and are recognized by top companies as worth their “hire” because of their innate ability to visualize the opportunity, motive and the lack of integrity necessary to commit a crime. Forensic accountants save their employers much more than their cost.

51 In the immortal words of Jim Croche: “You don’t tug on Superman’s cape.” “You don’t spit into the wind.” “You don’t pull the mask off the ole Lone Ranger and you don’t mess around with Jim.” Not the End, Just the beginning...


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