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By Derek Williamson 28 Oct, 2016
What is Forensic Accounting?
The integration of accounting, auditing and investigative skills yields the specialty known as “forensic accounting” which provides an accounting analysis that is suitable to the court which will form the basis for discussion, debate and ultimately dispute resolution. Forensic Accounting encompasses both Litigation Support and Investigative Accounting.
As forensic accountants, we utilize accounting, auditing and investigative skills when conducting an investigation. Equally critical is our ability to respond immediately and to communicate financial information clearly and concisely in a courtroom setting. Forensic accountants are trained to look beyond the numbers and deal with the business reality of the situation.

What does a Forensic Accountant do?
A forensic accountant is often retained to analyse, interpret, summarize and present complex financial and business related issues in a manner which is both understandable and properly supported.
Forensic accountants can be engaged in public practice or employed by insurance companies, banks, police forces, government agencies and other organizations.

A forensic accountant is often involved in the following:
  • Investigation and analysis of financial evidence
  • Development of computerized applications to assist in the analysis and presentation of financial evidence
  • Communication of their findings in the form of reports, exhibits and collections of documents. 
  • Assistance in legal proceedings, including testifying in court as an expert witness and preparing visual aids to support trial evidence.

In order to properly perform these services a forensic accountant must be familiar with legal concepts and procedures. In addition, the forensic accountant must be able to identify substance over form when dealing with an issue.

What should you consider when retaining a Forensic Accountant?
The following issues should be considered on retaining a forensic accountant:
  • The experience and qualifications of the forensic accountant.
  • The forensic accountant should be retained as early as possible in order to obtain the maximum benefit. The assistance that a forensic accountant can provide early in the process can be significant in reducing the overall cost and maximizing the benefit. If retained early, the forensic accountant can assist with the Examination for Discovery, identify additional areas of damages, assist with settlement negotiations and provide a preliminary assessment of the quantum of damages.
  • If the forensic accountant is being engaged as an expert witness then he or she should be given access to all of the relevant documentation. If restrictions are imposed upon the scope of the investigation there may be an impact upon the acceptance of the findings.
  • In situations where counsel is involved, the forensic accountant should be retained by counsel so that the privilege which exists between the client and counsel will be extended to the work product of the forensic accountant.

Criminal Investigations:
Forensic investigations often relate to criminal investigations on behalf of police forces. For example, a forensic accountant may be retained by local police forces and organizations such as the Law Society.
A forensic accountant's report is prepared with the objective of presenting evidence in a professional and concise manner.

Shareholders' and Partnership Disputes:
These assignments often involve a detailed analysis of numerous years' accounting records to quantify the issues in dispute. For example, a common issue that often arises is the compensation and benefits received by each of the disputing shareholders or partners.

Personal Injury Claims / Motor Vehicle Accidents:
A forensic accountant is often asked to quantify the economic losses arising from a motor vehicle accident. The forensic accountant needs to be familiar with the legislation in place which pertains to motor vehicle accidents.
Cases of medical malpractice and wrongful dismissal often involve similar issues in the calculation of the resulting economic damages.

Business Interruption / Other Types of Insurance Claims:
Insurance policies differ significantly as to policy conditions. Accordingly, these assignments involve a detailed review of the policy to investigate
coverage issues and the method of calculating the loss.
A forensic accountant is often asked to assist from either an insured or insurer's perspective in the settlement of the case.
Examples of these types of assignments include; business interruptions, property losses and employee dishonesty (fidelity) claims.

Business/Employee Fraud Investigations:
Business investigations can involve funds tracing, asset identification and recovery, forensic intelligence gathering and due diligence reviews.
Employee fraud investigations often involve procedures to determine the existence, nature and extent of fraud and may concern the identification of a perpetrator. These investigations often entail interviews of personnel who had access to the funds and a detailed review of the documentary evidence.

Matrimonial Disputes:
Matrimonial disputes from a forensic accounting point-of-view often involve the tracing, locating and evaluation of assets. The assets to be evaluated and valued may be businesses, property or other assets.

Business Economic Losses:
Examples of assignments involving business economic losses include; contract disputes, construction claims, expropriations, product liability claims, trademark and patent infringements and losses stemming from breach of non-competition agreements.

Professional Negligence:
These investigations are often approached from two different but complimentary perspectives, these being:
  • Technical - has a breach of Generally Accepted Accounting Principles or Generally Accepted Auditing Standards or other standards of practice occurred;
  • Loss Quantification.
  • If the professional in question is an accountant then we are often involved with both perspectives. If the matter involves some other professional the forensic accountant will normally be retained to perform only a loss quantification.
By Derek Williamson 28 Oct, 2016
What happens when the relative of a victim asks you to act on their relatives’ behalf to claim damages for serious life threatening injuries?

Ideally the family should contact a Solicitor as soon as possible after the injury. This is because many claimants do not know the systems and procedures, i.e. are there any Statutory Benefits they can claim; or, are there any interviews or photos that need to be acquired; or, should local authority Social Services be accessed; and, what is the Hospital doing? Remember that the medical condition and quality of life may be improved by early intervention, and you can help clients with this.

All too often we are asked by Solicitors to put a value on a Compensation Claim weeks or even days before a Court Hearing; which means the case does not get the benefit of a Cold Review. In our experience, the sooner a Forensic Accountant is involved; the greater the potential claim.

On a recent case, we were only approached during the adjournment and at the request of the Judge. Once we had completed our review. We assessed that the claim for £50,000 in damages, made by the Solicitors, was far too small. We expressed in detail our reasons for a revision of the claim; and the claimant’s solicitors then revised the claim before the next hearing. As a result, the plaintiff received £250,000 in damages together with all the costs. If the Judge had not requested our involvement the Plaintiff would have only received £50,000.

We have also noticed a reluctance amongst Solicitors to report the other side for failing to disclose material evidence. Why? Surely this reflects on the whole profession.

We have also noticed that key evidence is often hidden amongst “rubbish evidence”. Indeed, when Solicitors inform us of “unimportant dross” that has been produced; we immediately suspect something has been hidden in full view; and in over 60% of cases, we find important evidence.
Consideration should be given to how the Compensation is to be utilised. As we are Deputies to the Court of Protection, we are very cynical about members of the family managing the funds. In our experience too many cases result in financial abuse by family members. During the case the Solicitor should have gained an insight into the family and its probability to exploit the situation; and so should be steering all partners toward a “protective” Deputyship.
By Derek Williamson 28 Oct, 2016

With more and more people living longer, there is an increasing risk that they become unable to make financial decisions or manage their affairs.

Since October 2007 it has not been possible to form Enduring Power of Attorney, this had been replaced by Lasting Power of Attorney. It is possible to have joint attorneys to manage over affairs. Lasting Power of Attorney should be applied for before the “Donor” losses his or her facilities; and the Donor and at least 3 of their relatives must be notified of the intention to request the LPA.

The normal priorities would be:

·        Donors Husband/Wife/Civil Partner anticipates

·        Donors Children

·        Donors Parents

·        Donors Brothers and sisters

There are others relatives who may be required to be notified if there are no immediate family members.

In addition when making out the Lasting Power of Attorney; the proposed Attorneys should also ensure that the power has an up to date will.

Goddards Accountants Disputes Division can assist with all these matters.


By Derek Williamson 28 Oct, 2016

A Solicitor approached us, his client’s husband had been killed when run over; and the Solicitor had been offered £50,000 for the widow. He asked us to check the figures and agree the pay-out was fair. We found that the husband was 66 and a driver for a large firm which had agreed to continue to employ him until he was 70 because his wife was crippled and in a wheelchair.

He had been run over and killed on a third parties premises, their insurers accepted liability. The only concern was that the £50,000 was acceptable.

Following representations to the employers, we were able to show the loss of earnings for the rest of his working life were substantially in excess of the £50,000 offered.

We wrote a report setting out why we believed £50,000 to be unacceptable and our basis for a revised pay out. As a result, the widow eventually received £250,000 compensation.

In another case the claimant had been in the Navy; and “struck” on the head with a Block and Tackle, resulting in him being permanently brain damaged and a “cabbage”.

On checking his service record we found that he had passed out of Dartmouth with honours, and was rated to “go far”. The Navy denied all responsibility or liability but we were able to prove that the accident was entirely avoidable and their fault. We used the claimants training and service listing as our basis for probable future earnings; with the result that our client was awarded over £2 Million in damages.

By Derek Williamson 28 Oct, 2016

As we all know the EU anti-money laundering directive came into force on 26th June 2015; with member states having 2 years to turn the directive into Law. This directive covered Banks, Accountants, Solicitors and any business making or receiving cash payments worth at least €10,000 regardless of whether the payment was made in a single transaction, or via a series of linked transactions. As always the Directive is vague as “Gambling Operators” could also be subject to the new rules.

The new regime has brought into force new customer/client due diligence checking requirements together with new obligations to report suspicious transactions and maintain records of payments (which I know all solicitors do). Professional firms will also have to install internal controls to control money laundering and terrorist financing activities (if not already done). Since June this year all Limited Companies now have to file “People with Significant Control” as part of the Annual Return. This is supposed to expose individuals and so reduce the risk of money laundering.

In May this year David Cameron, just before the launch of the Anti-Corruption Summit, revealed plans to require all foreign companies buying property in the UK to disclose their true owners in a public register for the first time. The government’s intention is to go further than merely requiring firms to prevent bribery and “TAX EVASION”. Indeed, should an employee be charged with money laundering, the company will be deemed liable if it cannot show that it had put procedures in place to prevent money laundering and fraud.

Money laundering problems clearly afflict the largest banks such as Citigroup and HSBC and JP Morgan Chase Here it is not “cash” that is laundered but millions of dollars or pounds, usually emanating from Mexico, Columbia or the Middle East.

Solicitors need to carry out due diligence when receiving funds from clients even for property purchases. Did the funds come from the sale of another property owned by the client, or was it from a third party? If so what due diligence has been carried out on them? It is not enough to accept the claim by the client that it is a loan from a friend.

Whether it is a large firm, or a tiny practice, the potential for money laundering is always present. Anywhere that money flows, there is danger that the proceeds of financial crimes will be washed through the financial system.

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By Derek Williamson 28 Oct, 2016
What is Forensic Accounting?
The integration of accounting, auditing and investigative skills yields the specialty known as “forensic accounting” which provides an accounting analysis that is suitable to the court which will form the basis for discussion, debate and ultimately dispute resolution. Forensic Accounting encompasses both Litigation Support and Investigative Accounting.
As forensic accountants, we utilize accounting, auditing and investigative skills when conducting an investigation. Equally critical is our ability to respond immediately and to communicate financial information clearly and concisely in a courtroom setting. Forensic accountants are trained to look beyond the numbers and deal with the business reality of the situation.

What does a Forensic Accountant do?
A forensic accountant is often retained to analyse, interpret, summarize and present complex financial and business related issues in a manner which is both understandable and properly supported.
Forensic accountants can be engaged in public practice or employed by insurance companies, banks, police forces, government agencies and other organizations.

A forensic accountant is often involved in the following:
  • Investigation and analysis of financial evidence
  • Development of computerized applications to assist in the analysis and presentation of financial evidence
  • Communication of their findings in the form of reports, exhibits and collections of documents. 
  • Assistance in legal proceedings, including testifying in court as an expert witness and preparing visual aids to support trial evidence.

In order to properly perform these services a forensic accountant must be familiar with legal concepts and procedures. In addition, the forensic accountant must be able to identify substance over form when dealing with an issue.

What should you consider when retaining a Forensic Accountant?
The following issues should be considered on retaining a forensic accountant:
  • The experience and qualifications of the forensic accountant.
  • The forensic accountant should be retained as early as possible in order to obtain the maximum benefit. The assistance that a forensic accountant can provide early in the process can be significant in reducing the overall cost and maximizing the benefit. If retained early, the forensic accountant can assist with the Examination for Discovery, identify additional areas of damages, assist with settlement negotiations and provide a preliminary assessment of the quantum of damages.
  • If the forensic accountant is being engaged as an expert witness then he or she should be given access to all of the relevant documentation. If restrictions are imposed upon the scope of the investigation there may be an impact upon the acceptance of the findings.
  • In situations where counsel is involved, the forensic accountant should be retained by counsel so that the privilege which exists between the client and counsel will be extended to the work product of the forensic accountant.

Criminal Investigations:
Forensic investigations often relate to criminal investigations on behalf of police forces. For example, a forensic accountant may be retained by local police forces and organizations such as the Law Society.
A forensic accountant's report is prepared with the objective of presenting evidence in a professional and concise manner.

Shareholders' and Partnership Disputes:
These assignments often involve a detailed analysis of numerous years' accounting records to quantify the issues in dispute. For example, a common issue that often arises is the compensation and benefits received by each of the disputing shareholders or partners.

Personal Injury Claims / Motor Vehicle Accidents:
A forensic accountant is often asked to quantify the economic losses arising from a motor vehicle accident. The forensic accountant needs to be familiar with the legislation in place which pertains to motor vehicle accidents.
Cases of medical malpractice and wrongful dismissal often involve similar issues in the calculation of the resulting economic damages.

Business Interruption / Other Types of Insurance Claims:
Insurance policies differ significantly as to policy conditions. Accordingly, these assignments involve a detailed review of the policy to investigate
coverage issues and the method of calculating the loss.
A forensic accountant is often asked to assist from either an insured or insurer's perspective in the settlement of the case.
Examples of these types of assignments include; business interruptions, property losses and employee dishonesty (fidelity) claims.

Business/Employee Fraud Investigations:
Business investigations can involve funds tracing, asset identification and recovery, forensic intelligence gathering and due diligence reviews.
Employee fraud investigations often involve procedures to determine the existence, nature and extent of fraud and may concern the identification of a perpetrator. These investigations often entail interviews of personnel who had access to the funds and a detailed review of the documentary evidence.

Matrimonial Disputes:
Matrimonial disputes from a forensic accounting point-of-view often involve the tracing, locating and evaluation of assets. The assets to be evaluated and valued may be businesses, property or other assets.

Business Economic Losses:
Examples of assignments involving business economic losses include; contract disputes, construction claims, expropriations, product liability claims, trademark and patent infringements and losses stemming from breach of non-competition agreements.

Professional Negligence:
These investigations are often approached from two different but complimentary perspectives, these being:
  • Technical - has a breach of Generally Accepted Accounting Principles or Generally Accepted Auditing Standards or other standards of practice occurred;
  • Loss Quantification.
  • If the professional in question is an accountant then we are often involved with both perspectives. If the matter involves some other professional the forensic accountant will normally be retained to perform only a loss quantification.
By Derek Williamson 28 Oct, 2016
What happens when the relative of a victim asks you to act on their relatives’ behalf to claim damages for serious life threatening injuries?

Ideally the family should contact a Solicitor as soon as possible after the injury. This is because many claimants do not know the systems and procedures, i.e. are there any Statutory Benefits they can claim; or, are there any interviews or photos that need to be acquired; or, should local authority Social Services be accessed; and, what is the Hospital doing? Remember that the medical condition and quality of life may be improved by early intervention, and you can help clients with this.

All too often we are asked by Solicitors to put a value on a Compensation Claim weeks or even days before a Court Hearing; which means the case does not get the benefit of a Cold Review. In our experience, the sooner a Forensic Accountant is involved; the greater the potential claim.

On a recent case, we were only approached during the adjournment and at the request of the Judge. Once we had completed our review. We assessed that the claim for £50,000 in damages, made by the Solicitors, was far too small. We expressed in detail our reasons for a revision of the claim; and the claimant’s solicitors then revised the claim before the next hearing. As a result, the plaintiff received £250,000 in damages together with all the costs. If the Judge had not requested our involvement the Plaintiff would have only received £50,000.

We have also noticed a reluctance amongst Solicitors to report the other side for failing to disclose material evidence. Why? Surely this reflects on the whole profession.

We have also noticed that key evidence is often hidden amongst “rubbish evidence”. Indeed, when Solicitors inform us of “unimportant dross” that has been produced; we immediately suspect something has been hidden in full view; and in over 60% of cases, we find important evidence.
Consideration should be given to how the Compensation is to be utilised. As we are Deputies to the Court of Protection, we are very cynical about members of the family managing the funds. In our experience too many cases result in financial abuse by family members. During the case the Solicitor should have gained an insight into the family and its probability to exploit the situation; and so should be steering all partners toward a “protective” Deputyship.
By Derek Williamson 28 Oct, 2016

With more and more people living longer, there is an increasing risk that they become unable to make financial decisions or manage their affairs.

Since October 2007 it has not been possible to form Enduring Power of Attorney, this had been replaced by Lasting Power of Attorney. It is possible to have joint attorneys to manage over affairs. Lasting Power of Attorney should be applied for before the “Donor” losses his or her facilities; and the Donor and at least 3 of their relatives must be notified of the intention to request the LPA.

The normal priorities would be:

·        Donors Husband/Wife/Civil Partner anticipates

·        Donors Children

·        Donors Parents

·        Donors Brothers and sisters

There are others relatives who may be required to be notified if there are no immediate family members.

In addition when making out the Lasting Power of Attorney; the proposed Attorneys should also ensure that the power has an up to date will.

Goddards Accountants Disputes Division can assist with all these matters.


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