Forensic accounting is the specialty practice area of accounting that describes engagements that result from actual or anticipated disputes or litigation. ”Forensic” means “suitable for use in a court of law”, and it is to that standard and potential outcome that we forensic accountants generally have to work.
Forensic accounting uses investigative techniques, accounting skills and business skills to aid in the collection and collation of information to be used as evidence in court cases. In practical terms it encompasses financial expertise, a strong understanding of business reality and the workings of the legal system.
For example our work may include:
- Reviewing the factual situation.
- Providing assistance in order to obtain documentation and information necessary to support or refute a claim.
- Reviewing the relevant documentation and information to form an initial assessment of the case and identify an area/s of loss.
- Providing assistance with examination for discovery, including the formulation of questions to be asked regarding the financial evidence.
- Co-ordination with other experts in the matter.
- Reviewing the opposing expert’s report and reporting on both the strengths and weaknesses of the positions taken.
- Providing attendance at trial while hearing the testimony of the opposing expert and also providing assistance with the cross-examination.
We do not undertake traditional audit work of verifying the accounts of an organisation. Auditing is different to forensic accounting and just as forensic accountants should not undertake external audit roles, we believe that auditors do not have the specialist skills to undertake forensic accounting work.
Awheela Forensic Accounting Consultants specialises in investigations and are often involved in recovering proceeds of crime and in relation to confiscation proceedings concerning actual or assumed proceeds of crime. An investigation is a search for the truth. We assist clients determine whether criminal matters such as employee theft, identity theft, and insurance fraud have occurred. We also assist with quantifying losses from fraud, theft, breaches of royalty and licensing agreements.Our work also includes recommending actions that can be taken to minimise future risk of loss.
As forensic accountants, we utilise an understanding of business information and financial reporting systems, accounting procedures, evidence gathering and investigative techniques in order to perform our clients’ work.We are being engaged in more proactive risk reduction roles by designing and performing procedures as part of forensic reviews and risk assessments and regularly act as advisers to audit committees, risk committees and governance committees.
Along with recent corporate collapses, white collar crime continues to rise. Law enforcement is under increasing financial pressure and cannot investigate every instance of unethical behaviour. We combine financial, analytical and investigation experience gained from investigating large-scale international frauds, public sector corruption, employee fraud and misconduct.
We help clients to establish the facts, find out what has gone wrong by interviewing witnesses and possible suspects and collecting information from your records including computer records. This will assist you in recovering stolen assets, making an insurance claim if required and taking disciplinary action or commencing legal proceedings against the parties involved.
As part of our investigations we can:
- Interview witnesses who may have knowledge to support the investigation and obtain statements
- Collect, collate, secure and analyse evidence
- Trace funds / assets / goods
- Liaise with in-house and external counsel
- Liaise with law enforcement and regulatory bodies
- Organise a forensic examination of computer systems
- Develop a strategy to continue the conduct of the investigation
- Establish the quantum of loss
- Provide evidence to support a claim against an organisation’s fidelity insurance policy
- Assist in the preparation of a Statement of Claim
- Prepare a brief of evidence to be used in legal proceedings
We work to ensure confidentiality, compliance with legal and ethical guidelines and help you in managing your reputational risk.
We would be happy to discuss your concerns with you on a confidential basis. We have the experience to assist you with:
- Investigations of unethical behaviour – investigating allegations of improper conduct within an organisation.
- Fraud investigation – determining the facts of suspected fraudulent activity within or against organisations.
- Intellectual property investigations – investigating the theft of IP and other intangible assets.
- Investigating breaches of disclosure guidelines and Corporations Law.
At Awheela Forensic Accounting Consultants, we have developed a range of services that can assist your organisation reduce the likelihood of fraud and corruption occurring and when it does, identify it more readily.
Developing a Fraud and Corruption Plan
Fraud and corruption is more prevalent than most board members and senior management realise. Surveys conducted over recent years show quite clearly that the larger the organisation, the greater the losses to fraud and corruption.
Fraud and corruption can destroy an organisation’s reputation, shake investor confidence and result in civil and criminal prosecution of directors and management. The impact of fraud upon an organisation can be devastating.
With corporate governance under intense scrutiny, the market is looking to company directors and management to stamp out corporate fraud, and regulations are tightening to support this.
Good fraud governance requires more than just ensuring an effective system of internal controls. It requires:
- a strong and clear message from senior executives and non-executives who are prepared to lead by example;
- clear policies and standards;
- knowledge of the key fraud risks;
- effective fraud and corruption reporting;
- awareness training; and
- the development of a strong culture of ethics and honesty.
The performance of an organisation can be improved through an organisational-wide application of a fraud and corruption strategy that incorporates these elements.
All organisations should have a Fraud and Corruption Control Plan. It is necessary to ensure that a thorough review has been conducted of all preventative and detective functions within the organisation and that responsibility has been allocated for review and maintenance of these functions.
We also render the following Forensic Accounting Services:
Business Failure Causation – When a business begins to fail, there are a number of possible causes. If the source of the decline is diagnosed early, this situation is often reversible. We will investigate possible causes, perform a thorough analysis and help you determine the reason for the decline in business.
Occupational Fraud – Occupational fraud is the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets. We will discreetly investigate and document any financial misappropriations in your company.
Securities Fraud – Also known as stock fraud or investment fraud, securities fraud occurs when investors make purchase or sale decisions on the basis of false information in violation of securities laws–frequently resulting in losses. If securities fraud is found in your company, you will need to analyze, quantify and document the losses as soon as possible.
Hidden Asset Analysis – Assets can be hidden an innumerable number of ways for a variety of reasons. Our seasoned professionals are trained to find these hidden assets, discover how they were hidden and for how long.
Net Worth Theory & Analysis – In cases of divorce, mergers, or partnership absolution, net worth theory and analysis is a vital component of legally binding documentation. We will investigate all legal sources of income, investments and savings to determine and document an individual’s net worth.
Another main duty of a forensic account is to assist in obtaining documentation to form an initial assessment of the case and identify areas of loss. The forensic accountant may review the relevant documentation to assess the case and identify loss. This may require the financial accountant to assist with settlement discussions and negotiations, as well as attend a trial to hear the testimony of the opposing expert, and to provide assistance with cross-examination.
Forensic accountants become involved in an array of investigations. This may involve:
– Criminal Investigations, where a forensic accountant may be required to prepare a report with the objective of presenting evidence in a professional and concise manner;
– Shareholders’ and Partnership Disputes, involving assignments that require a detailed analysis of numerous years of accounting records in order to resolve, for example, compensation and benefits disputes of shareholders or partners;
– Personal Injury Claims, when a forensic accountant is asked to quantify economic losses resulting from an accident, often calculating resulting economic damage in cases of medical malpractice and wrongful dismissal;
– Business Interruption, reviewing the details of an insurance policy, for example, to investigate coverage issues and the appropriate method of calculating the loss of areas such as business interruptions, property losses, and employee dishonesty (fidelity) claims;
– Fraud Investigations, which involves a forensic accountant’s work in determining funds tracing, asset identification, and recovery, most commonly performed with employee fraud cases;
– Matrimonial Disputes, which require a forensic accountant to trace, locate, and evaluate assets, including businesses, properties, and other personal assets;
– Business Economic Losses, that of which includes areas such as contract disputes, construction claims, expropriations, product liability, trademark or patent infringements, and losses occurring from a breach of a non-competition agreement;
– Professional Negligence, either through a technical perspective, where the forensic accountant will investigate a breach in an agreement, or through a loss quantification; and
– Mediation and Arbitration, where a forensic accountant may be hired to become involved in an alternative dispute resolution so that individuals and businesses may resolve disputes with minimal disruption and with a minimal amount of time.
While we receive unique assignments from each client, most assignments will include the following steps:
- Meet with the client to understand the important facts, people, and issues at hand.
- Perform a conflict check.
- Perform an initial investigation.
- Develop an action plan, setting objectives to be achieved, as well as the methods that should be used to accomplish them.
- Obtain relevant evidence that may include documents, economic information, assets, or other proof of the occurrence of an event.
- Perform the analysis, which may involve calculating economic damages, summarizing transactions, tracing assets, performing present value calculations, performing a regression or sensitivity analysis, utilizing a spread sheet, database, or other computerized model.
- Preparing a final report.
Our firm may be hired by a variety of institutions, including attorneys and law firms; police forces; insurance companies; government agencies; banks, credit unions, and financial lenders; courts; and business owners. They may hire forensic accountants based on their experience and qualifications, as well as their neutrality to their particular situation, especially if damages are involved.