the use of accounting skills to trace assets and investigate fraud.
Asset and Income Tracing Techniques
One of the biggest challenges in a case with substantial assets is connecting the assets to the criminal activity. Asset and income tracing helps establish this link by investigating the paper trail, the series of documents providing written evidence of a sequence of events or the activities of a person or organization.
A financial investigation should be considered at the beginning of a criminal case. Gathering financial documents via subpoena, can generally take an extended amount of time. The many benefits of asset and income tracing include: providing valuable evidence to prove a crime, assist in the generation of new leads and additional targets, and the identification of assets subject to forfeiture in connection with a crime.
Financial investigations are divided into two stages. The first is creating a financial picture of the target and obtaining all relevant financial records about what assets the target possesses or is connected to. The second is analyzing all of the financial information obtained to establish what assets are connected to the crime.
At Sage Forensic Accounting, we have the expertise and experience to assist these cases.
Damage Calculations For Lost Business Opportunities
A business interruption can be either an anticipated or unanticipated disruption of the normal operations of a company. When a business interruption loss reaches a certain level in value and/or complexity, adjusters turn to forensic accountants to clarify the financial picture and assist in evaluating a fair outcome for the insured and their insurance company. Once it is determined the claim requires this type of expertise, it is optimal to bring in a forensic accountant to join the insurance team as early as possible to consider the financial implications within the claim. Sage Forensic Accounting will work with both the adjuster and the insured to assess the claim, evaluate all of the business factors that will have an impact on the financial picture, and help set the direction for the ultimate resolution.
As the damage of a business interruption increases, claims management is frequently hampered by the loss or destruction of financial and business data and records. In these events of missing financial data, it is crucial for a forensic accountant to be brought in to identify other processes for determining a business’ financial information. Looking at both the facts and the context of the business that has been interrupted, Sage will establish a defensible and accurate calculation of the financial impact for the adjuster and the insured.
Discovery and Separation of Assets In Divorce
The term dissolution of marriage refers to the ending of a marriage through legal proceedings, the same as divorce. In many jurisdictions, a couple may file a petition for the court to terminate their marriage pursuant to a written agreement between the parties. Such an agreement must cover all issues pertaining to the dissolution, allowing the matter to be concluded without a hearing or trial.
In most jurisdictions, divorce and dissolution of marriage are the same thing, each requiring the same legal proceedings to finalize. The proceedings may be adversarial, or the parties may work together to come to an agreement regarding all issues of distribution of marital assets, and payment of spousal support, as well as child custody and child support, if applicable.
If an agreement is reached, it is documented in a Marital Settlement Agreement, and presented to the court for approval and a final divorce order or decree. Any issues not settled between the parties may continue to trial, during which both parties will present argument, testimony, and other evidence to make their case. Leaving these things for the court to decide is a more expensive avenue for most litigants.
Fraud Investigation and Detection
The Association of Certified Fraud Examiners (ACFE) conducted a study of the most common types of fraud occurring within companies. The ACFE defines fraud as “deception or misrepresentation that an individual or entity makes knowing that the misrepresentation could result in some unauthorized benefit to the individual or to the entity or some other party.” According to the study, approximately 10% of incidents concern white collar crime. Asset misappropriation and corruption tend to occur at a much greater frequency, yet the financial impact of these later crimes is much less severe. Greed and work pressure are the most common factors pushing management to deceive investors and creditors.
Sage has been asked to review the accounting records of several companies in order to determine if fraud had occurred, the impact or damages due to fraud. Sage has also assisted in the review and enhancement of internal controls in order to prevent and detect fraud.
How To Dissolve a Business Partnership
Occasionally partners within a company will disagree on the direction of their business. When that occurs, a partnership dispute arises. As a result of personal relationships and history between partners dispute can be as emotional and personal as a divorce. It is not uncommon for partners to claim fraud, theft, and breach of fiduciary duties.
Partnership disputes are often ripe for mediation. Partnership mediation involves a third party neutral who can work with the parties and their counsel, to define the issues, discuss alternatives, and help the partners come to an agreement that satisfies both partners. If mediation is unsuccessful, or the parties cannot agree to mediate, then arbitration should be considered. Regardless of the nature of the partnership dispute, it is probable that the dispute could be arbitrated, especially if the partnership agreement requires arbitration. The partners can agree to arbitrate the dispute. If arbitration is not contractually required, or the parties cannot agree to arbitrate, then a lawsuit can be started seeking to define the rights of the partners. This litigation often results in a claim to dissolve the partnership and apportion the profits and losses between the partners. Needless to say, this process results in the partnership being dissolved and the two partners going their separate ways.