The SV Partners Forensic team offer an array of services in forensic disputes, economic loss analysis, dispute and forensic advisory services and company and business valuations to the legal profession, government, and corporations.
Forensic accounting is accounting work that relates to matters that are, or are likely to come before a Court. A forensic accountant is an independent expert witness providing expert evidence to assist the Court deciding the matter before it.
You would need a forensic accountant in the following types of situations:
There are a number of tools a forensic accountant can use to help detect fraudulent activity within a business. One of the most helpful class of tools are referred to as data analytics.
Data analytics consists of running certain tests over a database of information within the business to test for irregularities. While the exceptions that are identified as a result of these tests may not all represent fraudulent activity, they narrow the field in which to look. For example, a data file for a company’s creditors might be examined for matching bank account numbers found in the company’s payroll data. This could indicate an employee arranging for a fraudulent payment allegedly to a genuine creditor being paid into his or her own bank account.
A fraud risk assessment is a review undertaken by a forensic accountant that rates the businesses policies and procedures against a best practice standard, such as AS8001-2008.
The fraud risk assessment identifies areas where the business needs to improve its policies and procedures, and will offer assistance to achieve these improvements, as well as prioritising these improvements.
In terms of court proceedings, a forensic accountant is considered to be an expert witness and as such, can provide opinion evidence that can’t be provided by a normal witness. As an expert witness, the forensic accountant has an obligation to assist the Court in relation to the matters it must decide, and is not an advocate for the party who pays his or her fees. The benefit of this is the court will give more weight to the evidence given by a forensic accountant than it would if that same evidence was led by a party to the proceedings.
SV Partners can provide our clients with an objective and defensible opinion of the value of their business/organisation.
A business valuation is a procedure undertaken by a forensic accountant to determine what a business is worth. In essence, the forensic accountant is attempting to determine the present value of the future net cash flows a business will earn into the future. There are a number of methodologies used to value a business which include:
There are a number of reasons why a business would need to be valued, including:
Our team has extensive experience in being appointed an expert by either one or the parties, or as a single expert. We can provide you with properly considered opinions on all financial aspects of the case.
The most common types of work a forensic accountant does in relation to family law matters is to:
The only way to protect your assets from your spouse is to enter into a Binding Financial Agreement (‘BFA’). If a BFA is entered into before a marriage it is generally referred to as Prenuptial Agreement. BFA’s can also be entered into during the marriage or after its dissolution.
A BFA is a certain type of agreement in which the parties agree, upon breakdown of their marriage on:
Prior to a family law property settlement it is not uncommon for one spouse to attempt to hide matrimonial assets to maximise their slice of the cake. A forensic accountant will often be engaged to trace hidden assets and or unrecorded income. In searching for hidden assets a forensic accountant would perform some or all of the following:
In order to effect a family law property settlement, the net asset position of the parties must first be determined. This will entail either agreeing on a value for all of the assets and liabilities or having them professionally valued. While a real estate agent can value real property including the family home and business premises, a forensic accountant will be required to value the business interests and any superannuation interest that the parties might have.
Forensic accounts are often also asked to value or assess the earnings potential of the parties for the purposes of child support and/or spousal maintenance applications.
Our forensic accounting experts have extensive experience in quantifying business or personal losses as a result of insurable events.
A forensic accountant can be engaged by either side in an insurance matter to quantify the extent that the insured has suffered a loss. For example, a forensic accountant may assess the net present value of the past and future economic loss suffered by a victim of a motor vehicle or workplace accident.
A forensic accountant can assess the financial loss suffered as a result of actions by another party. The financial loss will be equal to the net present value of the difference between the notional past and future profit that could have been earned had it not been for the actions of the other party and the actual past and future profit earned by the business as a result of the actions of the other party.
Our expert services include documentation reviews, preliminary assessments of loss, financial analysis and research, culminating in formal written reports and the giving of expert testimony.
Forensic accountants are often asked to assist in assessing the losses allegedly suffered by one party as result of the actions of another. Examples of situations where there is a need to assess the alleged losses suffered include the following:
A breach of contract occurs when one party either knowingly or unwittingly fails to deliver on what it has agreed to provide under contract to another party.
A forensic accountant will be able to assess the loss actually suffered as a result of the breach of contract. This assessment can then be used as a basis of obtaining compensation from the party that breached the contract, either by way of direct negotiations or by applying to a court for an award of damages. The assessment of the losses would take account of both the risks involved in whether or not the losses would have actually occurred and the time value of money.
Claims for compensation are becoming more complex and increasingly more difficult to navigate. In such an environment, expert financial advice is often required to effectively analyse the financial information to assess the extent of any losses that may have been suffered.
The most common type of work a forensic accountant performs in relation to property matters is the valuation of a business for the purpose of a family law property settlement. However, there are numerous other areas where forensic accountant can be of assistance, such as a dispute between a property developer and the builder. In this case, a forensic accountant may be asked to investigate the costs claimed by builder under a cost plus contract to identify costs that should have been allocated to an unrelated development. Forensic accountants will also often be asked to value the loss suffered by business as result of the resumption of land by a constructing authority, such as a local council or a government department.