Forensic accounting is typically described as the review and analysis of accounting and financial documents and information in a variety of settings, with some typical examples being an investigation of potential fraud, or in the context of a dispute or litigation matter. Using specialized knowledge and skills, which includes accounting, finance, economics, financial modeling, and data analytics, a forensic accounting engagement typically involved the quantification of a dollar amount at issue, and the end product or report being suitable for presentation in a court of law. Typical forensic accounting engagements and tasks include accounting record reconstruction, data analytics, licensing and royalty inspections, asset tracing, lost profit and economic damage analysis, and serving as an expert witness in complex commercial litigation and business disputes.
Forensic accountants can be hired by a variety of clients, including: private and closely-held companies, public companies, boards of directors, public entries and agencies, partnerships, non-profits, educational institutions, among others. Forensic accountants can be hired to investigate situations of potential fraud relating to employees (often categorized in three main areas which include asset misappropriation, financial statement fraud, or corruption), third parties, to analyze licensing and royalty agreements, and to assess and quantify economic damages in contract disputes, partnership disputes, labor and employment matters, IP litigation, among other types of disputes and litigation. According to the Association of Certified Fraud Examiners’ 2018 Report to the Nations, fraud losses total over $1 million in 20% of cases.The communications and publishing industries suffer the highest median fraud losses annually, but all industries — including healthcare, technology and manufacturing — are severely impacted by fraud schemes.
Investigations may cover a wide array of issues, including allegations of fraud, embezzlement, asset misappropriation, material misstatements on financial statements, or kickback schemes. We have conducted investigations across many industries for entities of all sizes. Investigations include detailed examination and analysis of documents and records, investigative interviews, and report preparation of findings along with recommendations.
During trial, you need someone who is qualified by knowledge, training and experience in accounting and investigations. Our team is prepared to provide expert witness testimony during trial or depositions. We utilize our specialized skills and knowledge to evaluate data and present the facts in a manner best suited for a judge or jury. We understand the rules of evidence and will maintain document integrity throughout any case.
When your expert needs are such that you wish to maintain privilege, or the court does not require you to designate an expert, we can serve as consulting experts who do not testify but provide assistance with document review and fact presentation.
Our team can assist counsel in formulating questions for upcoming depositions related to financial and accounting documents. Oftentimes, discovery documents are quite voluminous. Our forensic experience provides us a keen eye for detail during document review, which can prove extremely beneficial during deposition preparations.
We have years of experience preparing schedules, charts and other graphics for presentation during trial. Our exhibits present the facts in a way that is clear and easy to understand―and helps you be more organized and effective during trial. We can prepare both electronic and hard-copy exhibits that may be introduced as evidence during proceedings, as well as an exhibit index for quick reference.
We have assisted many clients involved in various forms of dispute resolution in communicating with law enforcement agencies. We have provided support to the Federal Bureau of Investigation, Internal Revenue Service, district attorneys, postal inspectors, Securities and Exchange Commission and other law enforcement agencies throughout numerous investigations.
We assist attorneys and clients during mediation proceedings by analyzing complex data and providing our findings regarding issues in dispute. We are able to provide our clients with the tools necessary for negotiations during mediation, as well as any evidence required by an arbitrator.
Arbitrators require evidence and sometimes testimony. We prepare for arbitrations much like we would for litigation, conducting detailed analysis of complex financial data, preparing exhibits of summary level results, and providing expert reports to include detailed findings.
Our data collection and analysis skills and techniques enable us to provide our clients with the tools required to enter into settlement discussions. Further, we can review any opposing expert’s report and assist in formulating any necessary responses.
Our Certified Fraud Examiners are skilled in conducting fraud risk assessments that evaluate potential fraud risks and the effectiveness of the organization’s controls. When necessary, we work with our clients to develop and implement controls to help prevent and deter fraud. We conduct policy review and provide recommendations for policy revision, if needed, and can also help clients develop a fraud prevention training program and materials.
The bulk of our work revolves around analyzing voluminous, complex financial data. Armanino has the tools required to convert and analyze data quickly and efficiently. Our team is equipped with the proper resources and skills to conduct data analytics and spot any inefficiencies or anomalies that require further investigation.
Organizations often come to us after an alleged wrongdoing and have no knowledge of their true financial position. We work with clients to reconstruct incomplete or falsified accounting records, using a variety of record reconstruction methods ranging from computer forensics to examination of hard-copy documents.
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