MSING305 - Fraud, Ethics and Forensic Accounting

This module provides students with an understanding of the drivers for and practices associated with corporate fraud represented within published financial statements. It enables them to identify such practices and see through the myriad of smoke screens used to obscure financial reality. In so doing it examines the nature of fraud and the role of ethics in the context of financial reporting. It identifies mechanisms available to spot financial abuse before it arises, providing early warning signals of the chronically deceptive firm. This module establishes a framework for detective work where fraud may suspected but is hidden

Prior accounting/finance studies are not presumed. Successful completion of this module will result in having gained insights into and approaches to the valuation of businesses and processes for mergers, acquisitions and takeovers.

It is offered in Term 2 as an option/elective, as appropriate, on eligible Programmes in UCL.

The module organiser is Peter Clark from Department of Management Science and Innovation, UCL.

Lectures & Seminars

Lectures: Thursdays 11.00-13.00, Weeks 1-10 (no lectures or seminars during Feb. reading week)

Seminars: (beginning Week 2): Mondays 09.00-10.00 (A); Mondays 10.00-11.00 (B) NOTE: You only attend one seminar session and that MUST be the session to which you are assigned.

Module Assessment Summary

75% of the marks are awarded on the basis of examination result. The examination is held in the Summer Term and is unseen, and of 2 hours duration. 25% of the marks are awarded for coursework. There is one piece of coursework.


A successful student will have gained an appropriate knowledge and understanding to:

  • Understand the nature of and drivers for fraud within the financial dimension of corporate life
  • Recognize types of frauds
  • Understand the nature and relevance of ethics within corporate domain in general and the financial arena specifically
  • Facilitate an ability to look beyond the reported financial figures of a company in an effort to identify matters of interest and issues which may be obscured, intentionally or otherwise.
  • Enable reading of financial statements and company information ‘forensically’ – identifying, seeking and finding indicators which are in contrast with the presented financial figures
  • Evaluate the contributing roles of overly aggressive Earnings Per Share (EPS) expectations and executive compensation schemes used to encourage/discourage reporting abuses.
  • Diagnose and anticipate the Fraud Company some time before the announcement of a collapse, indictment or equivalent appears in the business media.
  • Understand the dilemmas of the innocent: empty pensions, whistleblowers, others.

Module Textbooks

Schilit, H. and Perler, J. (2010). Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, 3rd. Ed. McGraw-Hill, ISBN 978-0-07-170307-9.

Silverstone, H. and Sheetz, M. (2006). Forensic Accounting and Fraud Investigation for Non-Experts, 2nd Edition. Wiley ISBN 978-0471784876.

Readings will be assigned as appropriate.