As forensic accountants, we often see the results of poor partnerships, ones that aren’t planned properly and that end in tears and litigation. Many people will say “don’t go into business with friends, it will just end in tears” but…
We use Google and the internet as a valuable research tool in almost all our forensic accounting litigation matters. The information available enables us to check the stories of both the plaintiff and defendant against other sources of information.
Financial Statements tell a story
As forensic accountants, one of the first places we examine is the financial statements and income tax returns. To us they tell a story. The financial statements are a record of all the transactions of the business. We examine the trends and ratios of a business –
- Are they consistent with a business of this type?
- Are they consistent with the alleged activities and events of the parties?
- Is there cash not being declared?
- How is the business financed?
- Is the growth or decline of the business consistent with other ratios and transactions in the business?
Use of the Internet as a Research Tool.
Once we have examined the alleged facts and the financial statements, we look to the internet to provide us with further confirmation of the facts and financial statements. The following is available on the internet:
A simple google search of the individuals and the companies involved. We have found the following from a simple searches that only take a few minutes:
All business owners, no matter what size their business, need to understand the language of business … accounting.
Accounting can be simply described as keeping track of money. But the real benefit of accounting comes from understanding the relationships between the profit & loss statements, the balance sheet and cashflows.
Forensic accounting is not as glamorous as it may sound, writes Arnold Shields, but a good practitioner can provide vital analysis in support of a case. Shields explains how forensic accountants can help, and what lawyers should look out for
Any economic loss needs to take into account the relevant expenses incurred in earning that income.
As forensic accountants, acting for either the plaintiff or defendant, we often see claims for economic loss in commercial litigation and personal injury based on a level of income that is only for a short period of time.
Fiona Bateman of Dolman Bateman & Co, Forensic Accountants was recently interviewed by Stuart Washington of the Sydney Morning Herald, in relation to the conflicts associated with providing financial and investment advice where the industry is structured to sell products rather than advice.