Auditing involves the prevention, deterrence and detection of economic crime;
Forensic accounting involves its investigation, resolution and litigation.
We support Private/Public clients in setting criteria for relevant finance legislation (Mfma, Pfma, Ppppfm etc.) by performing data analysis and mining.
However not every forensic accounting engagement centres around fraud.
Sometimes Forensic accountants are hired to search for hidden assets during a Divorce, to help landowners whose property has been stolen with the stroke of a fraudulent signature, or to protect the estate of an elderly person whose has been targeted by someone looking to make a quick fortune.
Many fraud cases are small, but some are downright catastrophic, which is why names such as Enron and Libor are part of our Cultural literacy. Recent statistics show that $2,9 trillion (trillion with a t) is lost every year due to fraud.
Forensic accountants protect the interests of stockholders and employees whose life savings may be preserved within those entities.
Auditors should handover to forensic investigators immediateily after the first few red flags have been raised.
With the ever-changing IT environment, it has become almost impossible for any organisation to operate without technology.
Data mining is the process of analyzing data to discover trends, patterns and anomalies within a data set.
These trends may be completely innocuous and can be verified as such. However, some transactions - those falling out side expected norms - may signal the need for an investigation by forensic specialists who can apply their experience in data mining and in investigative techniques to the overall situation.
We use the power of data mining for several reasons:
|• The best evidence in an investigation often resides in its original,electronic form|
|• Data mining is often the most effective (and sometimes the only way) way
to gather needed evidence.
|• Data analysis enables investigators to merge disparate data sets together and
provide insights and information that would not be available through manual
|• Application of business rules to identify suspicious transactions can be performed
on large sets of data more effeciently using data mining.
Preserving ESI with Legal Holds :
Heres what usually happens at the start of a fraud investigation:
A certain issue (or a series of issues) comes to light that is the catalyst for the investigation. The legal team determines whether the issue has the potential to develop into legal action, often based on the preliminary findings of the investgators.
(other events, such as whistleblower letters or regulatory inquiries, can also provide the legal basis for this action.)
If the answer is yes, the attorneys issue a legal hold notice to the employees or custodians who maintain any electronically stored information.
When the notice is sent, the employees or custodians are being asked to conduct what's referred to as preservation hold.
The legal hold notice will clearly identify the types of documents and transactional systems (both paper and electronic) that are potentially relevant, and it should provide instructions to the recipients not to delete or modify these documents. Because the organisation being investigated may not want to disclose many details to some or all of the ESI custodians, this document must be worded carefully.
Daily actions create data trails that might prove critical should allegations of fraud arise. Computer registry files, acces logs, phone records etc. can add significant value during an investigation.
How one accesses, compiles and analyzes these various data can make all the difference to a successful forensic investigation.
Our systems interface with most major Financial Systems including: