Forensic Accounting Services - Overview

Expert witness forensic accountant Saul Gordon is available to be your forensic accountant for family law/divorce litigation, other civil litigation cases and criminal litigation cases, and can assist family law attorneys, other civil litigation attorneys as well as criminal litigation attorneys. Whether you are an attorney or a party to a lawsuit or a potential lawsuit, whether your case is big or small, whether you left it “to the last minute” or you made early preparations to engage a forensic accountant, whether you have an attorney or not, whether you are sure or unsure if you want to proceed with forensic accounting services, you are welcome to contact Saul for a consultation.

Forensic accounting cases are often a lot more involved than people think and can involve mental gymnastics, even for a forensic accountant. At times, it can be compared to trying to establish a picture from puzzle pieces where some, and perhaps many, of the pieces are missing. SGI has encountered situations where a party to a litigation has attempted to do the forensic accounting themselves. Watching some crime shows on television and being able to work a spreadsheet program does not make someone a forensic accountant. This is besides the fact that that person is a party to the lawsuit and issues of bias, etc. can arise. Often there isn’t a clear understanding of what evidence is or of the critical importance of the order/timing of certain events, etc.

Litigation can feel overwhelming, stressful and emotional. Forensic accounting work can result not only in the achievement of the scope of services including questions being answered (even if the answers are not easy to hear), and clarity about what has transpired, but may also provide some peace of mind to the party in litigation or possible litigation.

Even obtaining the evidence for a forensic accounting examination may be difficult. At times, the opposing party will co-operate in furnishing evidence even if a lawsuit is filed. Co-operation is often not present, or only partially present, and records will have to be subpoenaed. Subpoenas are useful for other reasons such as to reduce questions of authenticity of evidence so that allegations of alteration cannot reasonably be made. In addition to subpoenas, there are other ways in which evidence can be lawfully obtained.

As part of the scope of services, SGI may or will perform a variety of tasks such as examination of evidence, calculations, analysis, identifying, locating and organizing evidence from large quantities of production into spreadsheet analyses (both standard and case-specific), Bates-stamping and other referencing of evidence for tracking and for speedy retrieval under time-sensitive conditions such as when testifying, identifying red flags of fraud, identifying inconsistencies between different pieces of evidence, identifying misstatements, examining the alteration history of transactions, considering missing evidence, considering the source as well as the original source of the evidence, considering the purpose and use of multiple entities and financial institution accounts, considering lack of separateness (alter ego) issues, considering fraud risks in relation to internal controls and other factors, determining if representations made in various formats (including verbal statements) are consistent with other evidence, identifying indicators of intent, considering possible motives, considering fraud versus error, considering off-book transactions, identifying patterns of fraud, identifying the source (including nature/purpose) and use (including nature/purpose) of funds, tracing money (“following the money”), considering offsetting amounts (from related or unrelated transactions and dealings) such as reimbursements, quantifying losses, determining how specific monies were used, e.g., the proceeds from a loan/credit line or proceeds from the sale of an asset(s), reconstructing the financial trail, identifying undisclosed/hidden assets (including undisclosed/hidden financial institution/bank accounts), identifying undisclosed/hidden income, preparing document requests, synthesizing its work, identifying information/accounts to be subpoenaed, identifying individuals to be deposed, providing possible questions for interrogatories, conducting public records searches, identifying assets with which to satisfy a judgment, making observations, arriving at findings and conclusions, examining evidence on-site (e.g., at the offices of opposing counsel), attending and holding meetings, interfacing with attorneys, paralegals, investigators, other professionals and law enforcement, preparing questions for witnesses and conducting interviews, preparing questions for witnesses where interviews are conducted by others (attorneys and investigators), attending depositions (this is particularly important for proposing follow-up questions at the time of the deposition testimony), attending mediations and arbitrations, consulting, examining reports prepared by other experts, preparing possible cross-examination questions for witnesses (including expert witnesses) at deposition or trial, preparing letters, reports and appendices, exhibits and declarations, providing opinions, acting as a consulting expert, acting as a testifying expert and providing expert witness testimony at deposition, trial and otherwise, etc.

Although a forensic accounting examination can be performed in situations where there is evidence (even a lot of evidence) missing, forensic accounting cases are usually voluminous (even with missing evidence). A common misconception is that SGI only examines numbers. While numbers are very important to most forensic accounting cases, there are many different kinds of evidence that SGI examines and that it can derive useful information from. Important evidence may even be found in places a non-forensic accountant would not normally expect. Depending on the circumstances, certain types of evidence may include numbers but won’t primarily be composed of numbers. A forensic accountant may examine a variety of evidence including, but not limited to, financial institution account records (not limited only to statements but to include deposit tickets, checks deposited, checks paid, wire notices, signature cards, etc.), accounting records and supporting documentation, spreadsheets, tax returns, financial statements, transaction listings, budgets, projections, applications, official business documents (such as regarding formation and reporting/updates), minutes of meetings, evidence from police, sheriff and other law enforcement agencies (such as reports, audio recordings, affidavits, evidence obtained via search warrant, evidence listings and chain of custody documents), transcripts of testimony and proceedings (trial, deposition or otherwise), sworn statements, pleadings, emails, letters, text messages, memoranda, other forms of correspondence, written notes, audio and video evidence (including of depositions), interviews, transcriptions, agreements, private investigator and other investigator reports, photographs, escrow documents, notes, deeds, declarations, credit reports, rent rolls, property tax records, insurance records, published statistical data, etc.

Non-numerical or partly non-numerical evidence can play a crucial role in the overall outcome of the forensic accounting work including, for example, to explain the purpose/reason behind the movement of money from source to destination. For example, a loan may, in fact, be verbally authorized by a business owner to an employee who instructs the employee to write the loan check since the employee has custody of the checkbook as part of their job duties. The employee also has signature authority on the disbursing checking account. The employee writes and signs the check following the authority from the owner. The employee later angers the owner in some manner (e.g., perhaps the owner finds out the employee is looking for a new job) and the owner alleges the loan transaction was unauthorized and is fraud on the part of the employee and wants a civil resolution as well as a criminal prosecution. On the face of it, it looks problematic for the employee because the authorization was verbal (there was no written loan agreement) and the employee received funds other than for salary and by their own hand. During an interview with the forensic accountant, the employee remembers that the business owner said he was fine with making the loan but would need to ask his business partner for consent as well and did so via text message in the employee’s presence. The text message string is obtained from the business partner via subpoena and the text message indeed indicates authorization for the disbursement of the money to the employee as a loan. That piece of evidence changes the entire picture regarding the loan transaction which was later alleged as fraudulent.

Certain forensic accounting services are discussed in more detail in this services section of the website. At times, there is cross-over or overlap between and within different pages and sections therein. The content and examples provided on this website are not intended to be comprehensive of all possible forensic accounting situations that could occur.