While recovery is underway, some WA businesses are still facing uncertainty. The disruption caused by COVID-19 has led to a surge in disputes and the need for businesses to access litigation support.
This changing environment means that litigation lawyers need to apply scrutiny and ask the following questions when looking at financial documents. Do you know what you are looking at? Are they unaudited special purpose financial statements? Are the financial reports current, and do they take into account the impacts of COVID-19?
Unfortunately, financial statement fraud or misstatement is common in litigation and dispute matters.
Companies can manipulate financial statements to show the performance to be better or worse than it is.
There are many ways in which companies can artificially ‘boost’ their profits, for example by inflating the value of sales and debtors. But is this income going to be received?
Expenses to look out for in the profit and loss statement are “management fees” or “consultant fees”. Accruals should also be examined, are they going to be paid or is it simply a journal entry to increase expenses?
However, there may be legitimate reasons for some variations in the expenses and they may not necessarily be fraudulent.
Facing a serious dispute, investigation or litigation can be one of the most challenging times for any organisation. It is critical to have credible advisers you can trust.
BDO helps organisations address a wide range of lawsuits, investigations, and regulatory issues. Drawing on experience from diverse disciplines and backgrounds, our professionals combine the highest standards of technical skill and knowledge to gather, analyse and evaluate evidence.
Clients benefit from having trusted professionals integrated as an extension of their litigation support or legal team.
Our forensic accounting services team can assist in reviewing financial information and identifying any potential “red flags” that need to be investigated further.
If necessary, we can act as an expert witness in court proceedings and assist in the preparation of reports to calculate the loss of profit, earnings or future income.
BDO’s Forensic team help you manage the stages of the eDiscovery process on-demand and facilitate the data-driven stages of your litigation, investigation, and regulatory compliance matters.
We can also help to accelerate your review by utilising AI and machine learning to save you time by predicting which files are relevant to your case.
Contact me for a confidential discussion to see how we can simplify the financial side of litigations, leaving you to concentrate on the legal matters.
Advisory - Forensics
Direct: +61 8 6382 4914