Posted: 28 / 03 / 2022

Elisabeth Scott discusses how the UK’s legal teams are gaining clarity on their court cases with forensic accounting

Firstly, what is Forensic Accounting? Forensic Accounting is a special area of accounting that investigates legal disputes involving money, and a Forensic Accountant provides analysis suitable to be used in legal proceedings. A Forensic Accountant has many uses, both in criminal and civil law.

Forensic accounting for criminal law

It may be as simple as checking the figures. So many writers of reports do not check the figures. Generally, analysis has been prepared by somebody junior to be included in a report. We use this method at Sedulo Forensic Accountants, but work is monitored and checked by a senior analyst before being sent to a report writer for consideration.

An example:

We worked on a matter where the figures could not be reconciled to the Section 16 statement. Surely the author of Section 16 could not have made the figures up! No, they had not, but neither had they checked the work of the junior. The bank accounts had been incorrectly analysed, reporting withdrawals as credits and receipts as debits. Needless to say, when the day of the hearing came, our report was accepted without challenge by the Prosecution.

Many cases involving financial crime require a much more detailed analysis of financial, and sometimes the company, records. Often the Prosecution case is not based on expert evidence and relies on their own interpretation. As Forensic Accountants, we can analyse large amounts of data using specialist software, and present the analysis in an unbiased, clear, concise manner; ensuring our instructing party, the Judge, and the jury will understand it. Our analysis can identify errors, exaggerations, and double counting.

 

At Sedulo Forensic Accountants, our criminal work frequently consists of:

  • Analysis of large volumes of data including bank statements, company accounts, tax returns, invoices
  • Following the money – tracing the flow of monies between numerous bank accounts and identifying the final destination of the monies
  • Evaluating the value of the crimes and the Defendant’s personal gain (particular criminal conduct, general criminal conduct)
  • Identifying legitimate sources of income and distinguishing this from illegitimate income
  • Assessing the credits to a bank account and consider whether they are from legitimate sources
  • Considering whether the Defendant has Hidden Assets or has given any Tainted Gifts, and assessing the valuation of such

 

Forensic accounting for civil law

Our civil work generally is somewhat more “civil.” This doesn’t mean it is any less interesting – on the contrary, we have assisted on a number of complex corporate investigations which consisted of extensive analysis of company accounts, complete nominal ledgers, and the inner workings of the companies we were investigating.

A recent matter encompasses a dispute between the owners of multiple companies which has required analysis of huge amounts of data spanning over 30 years. The team has used specialist software and technology to evaluate the data and produce several reports in order to present our findings as clearly as possible.

A Forensic Accountant can use their expertise to add clarity to the situation, we provide professional, independent opinions which clearly represent the case.

At Sedulo Forensic Accountants, our civil work often includes:

  • Detailed analysis of company accounts and accounting systems
  • Analysis of personal and company tax returns
  • Evaluation of businesses and share values
  • Assessment of tax implications of divorce

 

What does a Forensic Accountant do?

Our services have assisted in streamlining and strengthening many cases over the years, and we have experience in many different areas. We can provide advice based on information and review of documentation and CPR compliant reports which will clearly present the facts of a situation, our analysis, and opinions.

Our services include:

  • Criminal cases, such as…
    • Pre-trial investigations
    • Confiscation cases
    • Account freezing orders and forfeitures
    • Fraud: mortgage, employee, romance, pension
    • Tax investigations
    • Trading of counterfeit goods
    • Money laundering
    • Theft
    • Human trafficking
  • Business Valuations
  • Commercial Litigation
  • Matrimonial Disputes
  • Personal Injury
    • Loss of income
    • Loss of pension
  • Professional Negligence

Our Forensic Accountants can also act as expert witnesses in both criminal and civil litigation. We accept instructions from Prosecution or Defence, Claimant or Defendant, and as Single Joint Expert.

 

So, why use a Forensic Accountant?

It’s simple. We provide clear, unbiased opinions based on our analysis of the data. We provide robust reports which lay out our findings in a simple, digestible manner. A Forensic Accountant is able to be used as an Expert Witness in court cases and is often a valuable piece of evidence. We can help alleviate highly stressful situations by efficiently analysing data in a relatively short timeframe.