Fraud Investigations

Our financial investigation services may involve matters concerning:

• Employee theft or misappropriation
• Vendor, billing, and procurement irregularities
• Misappropriation of company or fiduciary funds
• Payroll and expense-reimbursement irregularities
• Financial reporting and accounting irregularities
• Related-party and self-dealing transactions
• Check, wire, and electronic-payment irregularities
• Other suspected financial misconduct

The scope of an investigation depends on the financial activity being examined, the records available, and the specific questions to be addressed.

A financial investigation begins by identifying the transactions, accounts, individuals, entities, and time periods relevant to the financial questions being examined. Depending on the engagement, we may review bank and credit-card statements, general ledgers, invoices, purchase orders, payroll and expense records, contracts, check images, electronic-payment information, accounting-system data, and other transaction support.

We compare information across sources to understand how transactions occurred and were recorded. This may include matching accounting entries to bank activity, reviewing payments against available support, comparing transactions across accounts or entities, and analyzing the timing and amounts of financial activity.

As the investigation progresses, the analysis may identify additional transactions, accounts, entities, periods, or records requiring review. The scope of our procedures develops based on the financial activity identified and the information available.

Transactions may pass through multiple accounts, entities, or individuals before reaching their ultimate destination. Depending on the engagement, we trace funds through accounts and related entities to understand their source, movement, and disposition and reconcile transactions recorded in the accounting system with corresponding bank activity.

Tracing may involve following a single transaction or a series of related transactions over time. For example, funds may be withdrawn from one account, transferred through another entity, combined with other funds, or ultimately used for a different purpose. We organize the transaction history to show how funds moved and identify the accounts, recipients, and amounts involved.

Financial investigations may identify transactions that require additional analysis because they are inconsistent with other records, lack sufficient documentation, or differ from historical activity.

Depending on the circumstances, these may include:

• Payments lacking sufficient supporting documentation
• Duplicate payments or payments inconsistent with invoices or other support
• Unexplained withdrawals or transfers
• Related-party transactions requiring further analysis
• Personal expenditures paid through business accounts
• Changes or adjustments to accounting entries

The presence of an unusual or insufficiently documented transaction does not by itself establish financial misconduct. We analyze the transaction in the context of the available financial information and identify where additional information or analysis may be needed.

Once relevant transactions have been identified and analyzed, we may quantify the financial activity associated with the investigation. Depending on the engagement, this may include categorizing transactions and calculating amounts by account, recipient, entity, period, or other relevant characteristics.

We may prepare schedules that organize and summarize the identified transactions, distinguish them from other financial activity, and show how the amounts presented in our analysis were calculated and supported by the underlying financial records.

Where the matter also requires a calculation of financial loss or damages, see our economic damages page.

Financial investigations do not always begin with a complete set of records. Bank statements may be missing, accounting records may contain gaps, transaction descriptions may be unclear, or supporting documentation may not be available. Records from different sources may also cover different periods or contain information that does not readily reconcile.

We identify missing or inconsistent information and determine whether other financial records can help address the gap. For example, a transaction not adequately described in the general ledger may be further analyzed using bank statements, check images, invoices, electronic-payment records, or information from related accounts. Where appropriate, we may use multiple sources to reconstruct financial activity that is not fully documented in any single record.

The ability to reconstruct financial activity depends on the information available. Where the records do not provide a reliable basis for determining what occurred, we identify the limitation and explain how it affects our analysis rather than make an unsupported assumption.

Where the accounts, entities, or records sit outside the United States, the additional questions that raises are described under cross-border and international services.

Our reports and supporting analyses explain the financial activity analyzed, the procedures performed, and the resulting findings.

Depending on the engagement, our findings may be presented through written reports, transaction schedules, reconciliations, sources-and-uses analyses, or timelines. We explain the basis for the amounts presented and identify any limitations affecting our conclusions.

Our role is to identify, trace, reconstruct, quantify, and explain financial activity. We do not make legal determinations regarding whether conduct constitutes fraud, embezzlement, misappropriation, or another legal violation.

Insight Forensic & Valuation Services provides expert financial analysis in matters involving allegations of fraud and other financial misconduct. Our work may include assisting with financial discovery and document requests, conducting independent financial analyses, reviewing analyses prepared by other experts, preparing expert reports or other required disclosures, and providing deposition or trial testimony.

When testimony is required, our experts explain the financial information analyzed, procedures performed, and basis for their findings and conclusions.

The expert role across the whole of a matter is described under litigation support.