Why Are Forensic Accountants Important?
Given the complicated worlds of business and family life, it’s understandable that disputes can arise that require a great deal of financial acumen, attention to detail, and the capability to meticulously analyse mounds of paperwork to resolve. Such attributes are often out of the realms of business owners and legal professionals, which is why forensic accountants are instructed to assist.
While this may have once seemed like a far-fetched idea, it is now becoming evermore commonplace. A move to a more technologically-reliant society has meant that fraud is more complex than ever, while people and organisations are seemingly now more inclined to pursue what they believe is just and right. In addition, business dealings can involve an incredibly complex series of financial transactions that require an in-depth knowledge of accountancy to unravel.
Forensic accountants are highly-skilled individuals who go beyond the realms of traditional accounting to thoroughly analyse a situation and provide a detailed expert opinion that is so in-depth, it can even be utilised in court proceedings. It requires close attention to even the most minute details, the capability to analyse large volumes of documentation, and spot patterns of behaviour that might otherwise go unnoticed.
This extremely specialised discipline can be called upon in a variety of different scenarios, such as to resolve corporate or family disputes, investigate cases of financial crime, and assist in quantifying damages resulting from cases of business interruption or personal injury. A forensic accountant’s skillset can also be utilised by criminal defence solicitors dealing with fraud or cases involving the Proceeds of Crime Act.
Whatever the situation, a forensic accountant will follow a robust procedure that involves digging deep into the financial aspects of the case, analysing all of the facts, and producing a detailed report on their findings. They will also be able to appear as an expert witness and provide evidence under cross-examination. Such is their expertise, that their involvement in a case can often be pivotal in obtaining a positive resolution for a client.
Far from being just a reactionary field, forensic accounting can also be utilised by businesses who are worried about becoming a target of fraud. By performing an in-depth analysis of a company’s processes and operations, a forensic accountant can pinpoint potential weaknesses and recommend solutions to ensure that any loopholes are closed and the firm is protected.
Put simply, a forensic accountant possesses a unique set of skills and is able to undertake even the most demanding of cases that require so much time and attention-to-detail to resolve that they may seem impossible to manage. As society becomes even more business and technology orientated, this high level of demand for their services is only set to increase.
Who Hires Forensic Accountants?
Due to the field’s diverse nature, forensic accountants can be retained by a variety of people. From companies and lawyers, to insurers and creditors, forensic accountants are able to assist in a host of different scenarios — their main duties being to investigate and quantify financial loss.
While the investigations of forensic accountants usually culminate in a written report, their expertise can also be called upon in court by appearing as an expert witness.
Core Functions of Forensic Accounting
Thanks to their unique combination of skills and experience, forensic accounts can carry out a range of functions, including:
- Providing expert evidence in court
- Investigating and proving financial loss
- Performing a detailed investigation into company/personal accounts
- Identifying and tracing hidden assets
- Gathering of intelligence
- Carrying out due diligence reviews
- Defending Confiscation Orders
- Valuing of shares and business
The Forensic Accounting
Investigation Process
There are several important steps that a forensic accountant must carry out throughout each and every investigation. From obtaining a clear understanding of the situation, to providing detailed reports and even assisting with litigation matters, each of these responsibilities is essential to ensuring the best possible result for a client.
As with most areas that require specialist advice and assistance, it is important to engage with forensic accountants at your earliest opportunity. This ensures that you will still have a wide range of avenues and options available to you that might otherwise be lost. It could also potentially save you a lot of time, money, and stress. Here are the main steps of the forensic accounting investigation process:
Free eBook: The Complete Guide to Forensic Accounting
Whether you’re in the middle of a divorce, are having a disagreement with a fellow shareholder, you’re accused of/have been victim to financial crime, or are the subject of a POCA order, there is a huge variety of ways a forensic accountant can assist and support you through any situation, no matter how complicated.
Whatever your situation, our free guide to forensic accounting is designed to help you to better understand the work done by our team of experts. We cover how the process works, when a forensic accountant’s skill set can help you, their specific areas of expertise, and much more.
An Overview of Forensic Accounting
There are many ways in which people can benefit from the services of a forensic accountant. From resolving commercial and family disputes, to quantifying losses due to business interruption, and even offering expert assistance to criminal defence solicitors, it is no wonder why the practice has grown in importance. This is something that is only set to continue.
For all of these scenarios it is essential to contact a forensic accountant at your earliest possible opportunity. This not only could give you the best possible chances of success, but also could end up saving you a lot of time and money. Let us examine the different situations in which forensic accounting can help in more detail.
There are many different forms of commercial dispute cases, ranging from contractual disputes to professional negligence claims. If a business owner believes they have suffered a financial loss due to one of these scenarios, they can contact a forensic accountant to help quantify their loss and provide an impartial view on the merits of their claim.
The main types of commercial disputes include:
- Contractual disputes (such as lack of delivery or breaches of agreements)
- Fraud
- Outsourcing disputes
- Reputational disputes
- Patent and intellectual property disputes
- Professional negligence
- Compulsory purchase orders
- Transactional disputes
- Breach of duties
A specialist forensic accountant will be comfortable acting on behalf of a claimant or defendant in commercial dispute claims and will endeavour to bring the case to swift and successful resolution for their client.
Defending accusations of financial crime can be complicated. There will be a mountain of paperwork to review, and complex transactions to be scrutinised and followed. The expertise of a forensic accountant is crucial here, as it provides criminal defence solicitors with the know-how required to delve deep into the facts and uncover lines of enquiry that may otherwise be missed.
Financial crime cases are often built on the prosecution’s interpretation of the information, rather than a deep analysis of evidence and expert opinion. By understanding the facts and figures of a case, a forensic accountant can build a solid foundation for their client, upon which their defence team can operate.
It is not just in analysing the data and providing an expert opinion in which forensic accounting excels. By detailing their findings in an in-depth report that is easy to understand by both the judge and jury, and appearing as an expert witness during court proceedings, there are many ways in which a forensic accountant can add value to their client’s case.
Allowing partnership and shareholder disputes to continue for too long can be particularly damaging for a firm. With disagreements usually arising due to conflicting opinions about the value of a company, forensic accountants can assist by carrying out an in-depth investigation into the firm’s finances and standings to help bring the dispute to a close.
There are several reasons as to why partnership and shareholder disputes can arise. Perhaps a company’s shareholders believe that the directors are not carrying out their duties correctly or are in breach of them completely. They may even believe that their share dividends are not being paid out as they should be. Another potential cause for disagreement is when a shareholder or member of a partnership wishes to exit a company or liquidate it completely. A conflict of opinion can sometimes arise on the terms of departure and the value of their shares.
Whatever the circumstances, a forensic accountant can assist by collating, analysing and consolidating information to justify their client’s standpoint. This can involve anything from reviewing a firm’s financial figures, performing audits of its liquidity and tangible assets, to interpreting income reporting and profit and loss accounts. Forensic accounting can also be called upon to quantify damages, appear as an expert witness, or even rebut reports by opposing expert witnesses.
From marital disputes and divorce, to disagreements surrounding trusts and family businesses, there are many family dispute cases that forensic accountants can resolve. They do this by analysing money and paper trails, while also monitoring communications and looking out for behavioural changes. The aim is to ensure a fair result for all parties and a swift end to the argument.
When it comes to marital disputes, a forensic accountant can assist with the tracing of assets to determine that nothing has been hidden away — such as cash, stocks, annuities and insurance policies. If the two parties own a business together, forensic accounting can provide an assessment of the firm’s value in case one person wants to exit the enterprise altogether. Forensic accountants can act on behalf of one party or both as a Single Joint Expert. Because the disposal of assets could also attract a large Capital Gains Tax (CGT) bill, a forensic accountant can also be utilised to minimise the impact CGT can have.
Probates and trusts are also common family dispute cases that forensic accounting can help resolve. Duties involve analysing whether custodians of the trusts or probate have acted properly according to their obligations and that any assets have been distributed as intended. If instructed early on, a forensic accountant can bring a dispute to a conclusion without the need to resort to litigation. Meanwhile, for family businesses, a forensic accountant can assist in the same ways as standard commercial or partnership disputes.
Business interruption can be a huge drain on a company’s resources. Business insurance is designed to compensate the owners of a firm for their loss, if it was due to the actions of a third party, natural disaster, or other eligible cause. It is the job of a forensic accountant to quantify and prove this loss actually took place.
Commercial insurance claims can cover a wide range of costs, such as payroll and taxes, to property damages and the breakdown of essential equipment. Situations such as cyber threats, loss of connectivity and fire damage are usually covered under these policies, which can prove to be an essential lifeline for companies in their hour of need.
A forensic accountant will work with a claimant and their loss adjuster to put together a detailed claim and assist with the negotiation process to bring about a swift resolution. They can also operate on behalf of insurers or act on a joint basis.
It is unfortunate, but personal injury caused by negligence is quite a common occurrence and can result in the loss of earnings and/or pension. Forensic accounting can help quantify any financial damages incurred and act as an expert witness should the case proceed to the litigation stage.
No matter whether the loss of profits and/or earnings relates to personal injury, fatal accidents or clinical negligence, forensic accounts will act on behalf of either party, or on a joint basis. They will be instructed as an expert witness with a view to giving evidence in court, and can assist with anything from simple claims, to complex loss of profits.
It is worth pointing out that a forensic accountant does not act as a claims management company, nor will they manage a personal injury claim case.
Our Forensic Accounting Services
Inquesta’s range of specialist forensic accounting services are designed to assist with a wide range of scenarios, including:
How Inquesta’s Forensic Accounting and Investigation Services Can Help
No matter whether you need to quantify a financial loss, prove fraudulent activity, trace hidden assets, defend a financial crime case, or instruct an expert witness, you can rely on Inquesta to help. We are specialists in providing a detailed analysis of the numbers, and offer a holistic service that is tailor-made to suit your individual requirements.
The Inquesta team has amassed decades of experience in providing expert forensic accounting and investigation services in a wide range of scenarios — from marital and commercial disputes, to business intelligence and financial due diligence reviews. We are also highly experienced in appearing as an expert witness in court under cross-examination. This enables us to provide our clients with an industry-leading service that can be relied upon to produce the best results possible.
We always endeavour to place the needs and requirements of our clients above all else. With us, there are absolutely no hidden agendas, just a comprehensive service that leaves no stone unturned. All of our written communications, whether they be simple letters or complicated reports, are in plain English to make them incredibly easy to understand.
Our process begins with an in-depth preliminary review of your circumstances and situation. We will then provide you with detailed advice that outlines the work we can do and, crucially, whether we believe it is worth proceeding with your intended course of action. Once this has been done, we will give you a guaranteed fixed-fee quote for each phase of our investigation. This gives you a thorough understanding of the process from start to finish. Our expert team will also be on hand to provide essential assistance whenever it is required, offering you the peace of mind you need in what could otherwise be an incredibly stressful time.
Get In Touch
Our Specialist Team
Inquesta has assembled a team of forensic accounting specialists that are perfectly placed to assist — whatever your requirements may be.
Rob Miller
Director of Forensic Accounting
A co-founder of Inquesta, Rob Miller is a chartered accountant, a member of the Institute of Chartered Accountants in England and Wales (ICAEW), and a Practising Member of The Academy of Experts.
With decades of experience in providing specialist forensic accounting services, Rob has been instructed to assist with numerous cases — such as financial investigations, criminal defence and confiscation proceedings, commercial and contractual disputes, valuation matters, and much more besides. He has acted on behalf of claimants, defendants, and as a single joint expert.
Steven Wiseglass
Director of Insolvency
A co-founder of Inquesta, Steven is a licensed Insolvency Practitioner with over a decade of experience in the field. He is a member of the Insolvency Practitioners Association, Association of Business Recovery Professionals (R3), and his insolvency licence is issued by the Association of Chartered Certified Accountants. In addition, he sits on the R3 committees of the North West Regional Committee.
Mark Holdsworth
Head of POCA
A former head of Criminal Defence, Mark has over 16 years of experience as a forensic accountant, but has lately worked exclusively on financial crime matters. He assists defence teams in relation to criminal investigations and related proceeds of crime and confiscation proceedings. Mark is recognised and accredited as an expert witness by the Academy of Experts.
“Rob Miller is my first choice for forensic accountancy on criminal cases. He has an impressive eye for detail and adopts a ‘user-friendly’ approach to interaction with our clients and other professionals which ensures the smooth running of any task we instruct him to undertake.”
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