INTRODUCTION TO THE DIFA PROGRAM

Executive Summary

This Brief is presented for review and approval of the DIFA Program by the University's School of Graduate Studies, and subsequently the Ontario Council on Graduate Studies.

The DIFA Program is a graduate diploma that was created in November 2001 by action of the University's Governing Council. The Rotman School, the ~ c o l e des Hautes ~ t u d e s Commerciales (the University of Montreal's business school), and the Canadian Institute of Chartered Accountants (CICA) joined to create a distance education program in response to a recognized need in society. Essentially, the DIFA Program provides the best-educated expert witnesses on financial matters in Canada, if not the world. The Program also provides - for students who are graduate Chartered Accountants - the educational gateway to the CAoIFA post-graduate specialist designation offered by the CICA.

Since its inception, the Program has been governed by the Rotman School of Management and its budget has been held by the University of Toronto at Mississauga (UTM), subject to a surplus sharing agreement with Rotrnan. The Program is administered from offices located at UTM. During the next seven years, it is contemplated that UTM will develop a graduate unit for Forensics, which will oversee the DIFA Program in addition to those to be developed with roots in Anthropology and Biology and which build upon very successful undergraduate forensics programs. The Dean at UTM has committed to the hiring of a new tenure stream f a d t y member whose focus will be on the DIFA Program, and this new hire has been included in the relevant tables within this Brief.

Cohorts of students have been enrolled annually since 2001, and graduated each November since 2003. After four budget years of operation, the self-funded DIFA program has produced a modest cumulative surplus.

1.1 The DIFA Program

The DIFA program was created in November 2001 in response to the need identified by the legal community and the Canadian Institute of Chartered Accountants (CICA) Alliance for Excellence in Investigative & Forensic Accounting (Alliance) for a rigorous and comprehensive educational preparation to become investigative and forensic accounting (IFA) consultants, practitioners, and expert witnesses in legal proceedings. The public is at risk because many legal cases and disputes are being tainted by unprepared, uncertified so-called experts. Although the need for such programs is sigdicant and growing, there are very few available, and none as accessible, comprehensive and rigorous as the DIFA Programl. The DIFA on-site capstone, moot court experience with feedback from judges and lawyers is truly unique.

I The DIFA Program is a one-year program full-time equivalent graduate diploma program offered part-time over two years, requiring 10 half-courses. Other forensic accounting programs include a 40- week course taught by one instructor in South Aii-ica, and the Chartered Fraud Examiner (CFE) Program in the USA which consists of answering questions and attending a one weekend capstone. The Chartered Business Valuator (CBV) Program in

Graduates are prepared in a 10 half course (5.0 FCE) program to be experts in investigation for fraud and calculation of damages, advisors in disputes, and preparers and deliverers of information to the courts. Students entering the Program must have an understanding of accounting and business sigrufied by a four-year University of Toronto undergraduate degree, or equivalent, in Commerce, Business Administration or Accounting with a mid-B final year standing. Professional accounting experience and/or credentials (CAI CMA or CGA) is highly desirable. The first and last DIFA courses involve residence sessions at the University of Toronto at Mississauga Campus, and the middle eight courses are offered via e-learning, using problem-based learning in web- and email-based sessions, as well as in study group discussions and assignments. Students can and do participate from anywhere in the world.

The DIFA Program was developed in partnership with the ~ c o l e des Hautes ~ t u d e s Commerciales in Montreal (HEC) which is affiliated with the University of Montreal, and the Canadian Institute of Chartered Accountants (CICA) which provided $250,000 in development funding. The DIFA Program provides rigorous preparation for all of its students, and serves as the academic gateway for the post-CA specialist designation for IFAs known as the CAeIFA.

1.2 Objectives of the DIFA Program

The DIFA Program is designed to prepare graduates to be experts in investigation for fraud and calculation of damages, advisors in disputes, and preparers and deliverers of information as expert witnesses in the courts. To achieve the desired level of expertise by the end of the DIFA Program, applicants must acquire a sigruficant background in business practices and accounting before they are admitted, so that no further foundational education is necessary in either area. Consequently, DIFA coursework focuses on investigative and forensic matters, loss quantification techniques, legal process, and courtroom strategy and procedure.

The material delivered in the DIFA Program is more specialized and complex than that covered in other university and professional programs, and is beyond that required for professional qualification as a Chartered Accountant, Certified Management Accountant, or Certified General Accountant. DIFA courses are designed to cover at least that body of knowledge developed by the CICA Alliance for the post-qualification specialist designation, CAoIFA. This level of education is needed to combat the increasing complexity of schemes perpetrated by both organized and also non-professional white-collar criminals.

Investigative and forensic accounting is an emerging area of practice, research and education. Sources of educational material are quite new. Research journals have been established within only the last 3 years, and worthy books dealing with the modem, computerized, post-Enron world have appeared in 2003 and 2004. In this emerging environment, the DIFA Program has created the first and most comprehensive set of courses in response to the most complete knowledge syllabus. This has required the DIFA Program to create and gather readings, cases and other aids, and offers the chance to provide leadership as these materials are disseminated. Research projects generated as part of the Emerging Issues/ Advanced Topics course will become useful additions to the IFA body of knowledge.

Canada covers Loss Quantification and Legal Process in reasonable depth, but not the other 60% of the DIFA curriculum.

Evidence of Success

The success of the DIFA Program can be measured in several ways:

the Director of the Program and the senior HEC professor have combined with other researchers to be awarded an SSHRCC grant of $900,000 over three years for the study of IFA matters,

contributions to the IFA body of knowledge and the quality of teaching materials, such as:

o each student must prepare a properly-documented, independent research study during the Advanced Topics/Emerging Issues course of at least 50 pages on an emerging issue, and already one of the students who graduated in 2003 has had his suitably revised study published in the Journal of Forensic Accounting2,

o completed research studies are available for review by alumni, and the best of these will be available more widely through the UTM library system,

evaluations by students have been favourable, and evaluations by judges, lawyers, and IFA experts who participated in the capstone moot court have been uniformly very favourable on the quality of preparation and performance achieved by the students evaluated in 2003 and 2004, our first two graduating classes,

enrolment has stabilized and should grow from a core of 30 students per annum with continuing applications from around the world, and from important employer organizations including the major accounting firms, Kroll Worldwide (the major IFA firm in the world), the RCMP, the Forensic Accounting Management Directorate (of the Treasury Board), and several provincial securities commissions, and

the DIFA Program is financially viable as it has completed its three-year period of introduction with no accumulated deficit.

1.3 Method Used for Self-study including Preparation of the Brief

As part of the planning exercise, input was sought from faculty, and from advisory committees of the Program alumni, student, and firm representatives. A draft copy of this brief was made available for comment, and the comments were incorporated.

1.4 Fields in the Program

N/A

1.5 Action on the Concerns Expressed in the Previous Review

N/A since this will be the first review.

2 "Civil Court Procedures and Their Relevance to Expert Witnesses", N. Angellotti & L. Crumbley, Journal of Forensic Accounting, Volume 5 , Number 2, pp. 4 1 1-420.

1.6 Special Matters and Innovative Features

As noted above, the DIFA Program was developed in partnership with the ~coles des Hautes fitudes Commerciales in Montreal (HEC) which is affiliated with the University of Montreal, and the Canadian Institute of Chartered Accountants (CICA) which provided $250,000 in development funding. The DIFA Program serves as the academic gateway for the post-CA specialist designation for IFAs known as the CAeIFA.

In order to reach students across Canada and around the world, the DIFA Program was designed principally as an e-learning program with 8 of its 10 courses being offered on a distance education basis, and the first and tenth courses requiring residency at U of T. To enable the e-learning delivery, the Program contracted for the services of Embanet which was created by a U o T MBA alumnus in the early 1990's and is now used around the world. Embanet was first used by the Rotman School's Global Executive MBA Program.

In the utilization of e-learning techniques, the DIFA Program effectively utilizes U of T. resources while complying with OCGS, U of T and/or School of Graduate Studies (SGS) recommendations and/or policies and guidelines, as follows:

Report of the Task Force on Technology-Assisted Education CAE), Sept. 12,2001 This U of T Report recommends strong endorsement of TAE initiatives. It contains twelve recommendations that the DIFA Program fits within.

Guidelines for Distance Delivery - Extractfrom OCGS Policies, Janua y 2002 These guidelines define expectations for distance education programs which the DIFA Program meets, or expects to meet with the support of the Rotman School.

Guidelines for Joint Courses Between Universities to Support Collaborative Research 6 Professional Graduate Studies, SGS Council approved Jan. 28,2003

The DIFA Program does or expects to conform to these guidelines. The Rotman School controls the DIFA Program through its Associate Deans, Program Director and Standing Committees, enrolls all students, oversees all instructors, and manages all courses according to Rotman and SGS policies.