Forensic Accounting
Litigation Support
Fraud Investigations
Employee Embezzlements
Forensic Accounting
Webster’s defines “forensic” as “suitable for use in a court of law.” When applied in the accountancy arena, forensic accounting is the specialty practice area of accounting that describes engagements which result from real or anticipated litigation.
In today’s world of litigation, the art of forensic accounting is becoming evermore prevalent. Matters requiring forensic accounting include:
- Reconstructing records accidently or intentionally destroyed;
- Investigating accounting records including tracing transactions to supporting source documents;
- Valuing damages; and
- Analyzing financial results and balances for completeness and reasonableness.
Hugh’s forensic accounting skills have been used within many different areas, including civil litigation matters, corporate investigations, and probate and trust matters. He is skilled at evidence discovery and in reconstructing accounting and business records to uncover essential facts.
In addition to litigation engagements, Hugh also provides proactive forensic accounting services to identify any potential problems or control weakness, hopefully before any improper activity has taken place. While not able to provide absolute assurance that no fraud exists, these engagements help companies and organizations before a problem materializes by providing an objective outside review by accountants specializing in the field of fraud. The outside review also acts as a deterrent which strengthens the organization’s internal control environment.top
Litigation Support
In addition to utilizing forensic accountants as expert witnesses, attorneys are turning to forensic accountants as consulting experts on a more frequent basis. Attorneys have come to realize the value forensic accountants can add to a case as consulting experts, delivering specialized accounting expertise in a number of areas.
From discovery through trial, forensic accountants can prove invaluable in assisting counsel. Through their specialized training and experiences, the forensic accountant can assist counsel in preparing discovery requests, drafting interrogatories, reviewing financial documents, and preparing for depositions. When properly utilized, forensic accountants are truly value added.
Having been a litigator, Hugh is uniquely positioned to assist attorneys in preparation for litigation. He offers litigation support within several contexts and venues, including civil litigation, SEC investigations, and white-collar criminal matters. top
Fraud Investigations
The word “fraud” has several meanings and relates to many types of allegations and investigations. In a corporate context, “occupational fraud” is more meaningful and is defined as “The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets.” Occupational fraud is very broad and encompassing and includes schemes as simple of inventory theft or as complex as financial statement frauds.
Employee fraud relates to thefts and embezzlements through employment; financial statement fraud refers to companies misrepresenting their position and results within their published financial statements; and fiduciary fraud relates to theft or embezzlement by someone in a position of trust over someone else’s assets, to name a few.
There also exists a difference between “alleged” fraud versus actual fraud, and many investigations are predicated on the need to support or refute an allegation of some type of fraud. The key to any investigation is to remain “objective” and to identify every explanation possible to protect against reaching the wrong conclusion, the consequences of which are almost always irreversible.
Hugh has been involved in fraud investigations throughout his twenty-seven years of experience. Having been both an external and internal auditor as well as a CFO, he also has significant experience with evaluating internal controls within organizations, as well as fraud prevention.
As a Certified Fraud Examiner (CFE), Hugh is keenly aware of the damage that may occur when an investigation is not properly performed. While an internal auditor at a major defense contractor, he was frequently called upon whenever allegations of fraud arose. His involvement in fraudulent investigations has continued ever since. Hugh is available to assist outside counsel or inside counsel to resolve the investigation most effectively and efficiently. top
Employee Embezzlements
“Embezzlement” is defined as “the fraudulent appropriation of property entrusted to one’s care to one’s own use.” Employee embezzlement may take many forms including bribery, extorting illegal payments, accepting illegal gratuities, improper expense reimbursement, cash larceny, inventory larceny, and asset misappropriation, to name but a few. Reports of employees stealing from their employer have become nearly daily occurrences in the newspapers. What’s troubling is that statistically only one in nine cases is reported within the media. Many cases are settled for a variety of reasons and never result in criminal charges.
Early involvement of the forensic accountant in the investigation will enable them to utilize their experience and expertise to resolve the situation in the most favorable manner to the organization. Many cases involving allegations of embezzlement concluded that no evidence of such fraud actually existed, and identified the real explanation for the identified problem or issue. Reacting too quickly could lead to loss of key personnel and business interruption at best, and unwanted lawsuits at worst.
Once allegations of employee embezzlement have surfaced, upper management frequently lets their emotions get the best of them, resulting in “knee-jerk” reactions that are, ultimately, unbeneficial to the organization. A systematic, controlled and calculated approach is always required for these cases, especially during the emotional period of discovery. The most important thing to remember if a potential embezzlement is discovered - consult counsel before doing anything. top
