Financial forensics
Following the money, and proving where it went
Forensic accounting engagements usually arrive in one of two shapes. Either someone believes funds were moved and needs it documented to an evidentiary standard, or the records are such a mess that no one can say what happened without rebuilding them first. Both are tractable. Neither is quick, and we will give you a candid read on scope before you authorize the work.
Documenting the flow of funds
We trace cash through business and personal bank, credit card, brokerage and loan accounts, including matters where the relevant accounts run back many years. The output is a schedule that ties each traced transfer to the underlying source document, and identifies any transfer for which a source document was not available, so that each step can be examined on its own.
- Source and application of funds
- Where money came from and what it was used for, period by period, reconciled to the statements.
- Commingling and separate property
- Tracing nonmarital or separately held funds through commingled accounts.
- Transfers to related parties
- Distributions, loans and payments to insiders, affiliates and family members, tested against the books and against the substance of the transaction.
When the records will not support an opinion
In closely held companies and in insolvency matters, the books are frequently incomplete, internally inconsistent, or maintained on a basis that does not reflect what actually occurred. We rebuild the accounting records from bank activity and source documents to the point where a reliable analysis can be performed on them, and we document what was reconstructed and how, so that the rebuilt records can themselves be tested.
Suspected fraud and misappropriation
Fraud work at the firm is led by Certified Fraud Examiners. Engagements have involved diverted receipts, fictitious vendors, payroll and expense reimbursement schemes, unrecorded cash sales, and unauthorized owner withdrawals. We work at counsel’s direction and scope the investigation to the question that has to be answered, rather than auditing everything and billing for it.
Where the volume of transactions makes manual review impractical, we analyze transaction-level data to identify the population worth examining before anyone opens a box of paper.
What you receive
Tracing and investigative engagements produce schedules and exhibits built to be attached to a filing or marked at a deposition, supported by an expert report where one is required. Figures are presented so that a reader can follow each amount from the statement to the schedule to the conclusion without taking anything on faith.