From Chaos to Clarity in Financial Investigations

Written by Tracy L. Coenen, CPA, CFF

The financial part of a case can become overwhelming very quickly. Particularly in cases involving white collar crime, securities fraud, Ponzi schemes, or other fraud recoveries, the trail of financial documentation is often very long. A forensic accountant needs to examine the financial documents and piece together the evidence in a way that attorneys, judges, and juries can understand.

When there are mountains of data, the investigator needs a way to quickly examine the data, assemble it in a format that is usable, find connections between transactions, and quantify results. Traditional forensic accounting techniques are no longer effective in these types of investigations. The volume of data can quickly overwhelm the investigator, and this affects the quality of the results

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So Many Sources of Information, So Little Time

Written by Tracy L. Coenen, CPA, CFF

Private and public records offer a wealth of information to fraud investigators

On Balance – The Magazine for Wisconsin CPAs
September/October 2008

Without information, a fraud investigation goes nowhere. There are abundant sources of information on people and companies, and as the Internet continues to expand, so does the accessibility of the information.

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Methods of Searching For Unreported Income

Written by Tracy L. Coenen, CPA, CFF

Wisconsin Law Journal

Editor’s Note: Last week, Tracy Coenen identified some of the challenges of searching for unreported income. This week, she takes a look at some of the methods of tracking down that information.

Lifestyle Analysis
For the employee who is receiving cash in lieu of a real paycheck or who is otherwise concealing wages and earnings, it can be very difficult to prove the case. Cash doesn’t leave much of a trail, and a company that is willingly participating in a fraud like this isn’t likely to offer up proof of the fraud either.

Probably the most common way to prove unreported income is through a lifestyle analysis. In a lifestyle analysis, we aim to prove that the lifestyle lived by the party exceeds the reported earnings.

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Searching For Unreported Income

Written by Tracy L. Coenen, CPA, CFF

Wisconsin Law Journal

The million dollar question in many litigation disputes, be it family law, a shareholder divorce, or other corporate wrangling, often centers around unreported income. Are there sales that aren’t being recorded on the books? Is the individual receiving cash for work done? Is revenue hidden to shield it from being considered by the court?

It would be lovely to be able to wave a magic wand and have all the “hidden” income magically appear. Unfortunately, that’s just not going to happen in this lifetime. The search for unreported revenue and earnings is a difficult one.

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Behind the Numbers: Critical Financial Analysis in Litigation

The financial portion of a lawsuit is often high-stakes. This is especially true in cases of divorce, breach of contract, securities fraud, tax fraud, money laundering, and white collar criminal defense. Whether the other side is an individual, a company, or the government, you need an accurate analysis of the numbers for the benefit of your client.

There is almost always a story behind the numbers. Things are not always as they appear, and it is unwise to take the financial story at face value. A case can be won or lost based on your ability to find out the hidden truth about the numbers.

Finding the Data

Getting your hands on the right financial data depends on knowing what to ask for. The financial statements and tax returns are the obvious places to start. While they may not always be truthful, they still hold many clues to the financial story.

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