Financial Investigations

Financial Investigations might be requested by those with a responsibility to investigate, such as Boards of Directors, Audit Committees, Trustees or General Counsel.  Our services include investigating the propriety of the financial accounting for the subject of the investigation.  Whether the subject is revenue recognition, the apportionment of costs across borders, whether amounts were deferred when they should have been recognized, or whether costs were understated.

Such investigations often include the effect of an accurate accounting on salaries and bonuses, commissions and other incentive pay.  It may affect the value equation in stock for stock or stock for asset transactions that occurred during a period of misstatement.

Financial investigations are not necessarily fraud investigations, depending on the motivation, sophistication, and awareness of the persons involved.  Employees might misstate financial statements for years through a lack of understanding or misunderstanding of the applicable accounting standards.  Deliberate misstatements occur, too.  The fraud triangle is one of motive, opportunity and rationalization.  A person who can rationalize illegal behavior in an environment of weak financial controls or weak accountability is a risk for any organization if that person is in a position of trust or has authority over things of value.  Fortunately, frauds of any magnitude leave signs along the way. Recorded events that seem unlikely should be explored and understood.  Officers have a duty to investigate the improbable, and we can help.

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Last modified: 02/09/10