Forensic Accounting andFraud Investigation

Employee misconduct may involve unauthorized checks, electronic transfers, false reimbursements, personal credit-card charges, fictitious vendors, duplicate invoices, payroll manipulation, ghost employees, altered customer payments, skimming, inventory theft, and concealment through journal entries.

The investigation may trace transactions, identify responsible accounts or users, estimate the amount involved, and document the supporting records. Fraudulent intent and criminal responsibility are legal determinations, not accounting conclusions.

Vendor-related investigations may involve vendors connected to employees, duplicate or inflated invoices, payments without supporting documentation, altered vendor information, unapproved purchases, kickback allegations, personal purchases disguised as company expenses, payments to unexpected accounts, and transactions split to avoid approval limits.

Useful records may include vendor-master files, invoices, purchase orders, canceled checks, bank records, approval histories, email, and accounting-system activity.

Potential issues may include unauthorized raises or bonuses, payments to former employees, duplicate payroll records, false hours, personal employees paid by the company, payroll-tax inconsistencies, unexplained benefits, manipulation of commissions, and owner or partner compensation disputes. The analysis may compare payroll reports, bank records, personnel information, tax filings, time records, and general-ledger activity.

Revenue investigations may examine whether customer payments were redirected, deposits withheld, accounts written off improperly, sales concealed, receipts posted to incorrect customers, refunds or credits manipulated, cash sales unrecorded, or revenue moved to a related business. The work reconciles customer records, bank deposits, invoices, sales reports, and accounting entries.

Closely held companies frequently pay expenses that require analysis: was it business-related, who authorized it, was it treated as compensation or a distribution, was it disclosed to other owners, was it recorded consistently, did one owner receive an unequal benefit, did it violate an agreement, and was it concealed? The accountant presents the financial evidence; counsel determines the legal significance.

Disputed activity may involve self-dealing, related-party transactions, unequal distributions, excessive compensation, diversion of opportunities, undisclosed loans, asset transfers, manipulation of earnings, misclassification of expenses, payments to affiliated entities, and use of company resources for personal purposes. These engagements often combine forensic accounting with business valuation and litigation support.

A forensic review may analyze deposits and withdrawals, distributions, property sales, trustee or executor fees, payments to family members, transfers among accounts, expenses charged to the trust or estate, business activity, asset ownership, missing records, transactions shortly before or after death, and use of fiduciary authority.

Asset-tracing work may examine whether money or property moved to relatives, related companies, multiple bank accounts, brokerage or retirement accounts, real estate, loan payments, trusts, nominee entities, or business assets outside ordinary operating activity. Whether a transfer is legally fraudulent is a determination for counsel and the court.

Potential issues may include early or fictitious revenue, delayed expense recognition, unsupported journal entries, inflated assets, understated liabilities, hidden debt, improperly capitalized costs, manipulated inventory, altered reserves, related-party transactions, and misclassification of owner activity. The investigation compares tax returns, financial statements, general-ledger data, bank activity, source documents, and information provided to lenders or owners.

Forensic work in divorce may include business-income analysis, personal expenses through a business, asset tracing, separate-property tracing, undisclosed accounts, deferred revenue, related-party payments, owner compensation, lifestyle and spending analysis, review of transfers around filing dates, and opposing-expert analysis. This connects closely to the firm’s substantial divorce-litigation experience.

Potential issues may involve joint-interest billing, royalty distributions, working-interest expenses, revenue allocation, operator charges, related-party costs, well-level accounting, ownership records, payments among operators and non-operators, and property-sale proceeds. Specialized oil-and-gas accounting experience is a meaningful differentiator when the disputed records involve industry-specific accounting.