Fraud Investigations and Forensic Accounting

Fraud & Risk Management

Within the context of responsible management and effective leadership, organizations must consider the risks of fraud and malfeasance and how the consequences of these actions can impact stakeholders, enterprise value, and future operations. According to the Association of Certified Fraud Examiners’ (ACFE’) 2014 survey, the typical organization loses 5% of revenues to fraud each year.  This statistic does not include the collateral costs associated with investigating and prosecuting the fraudsters, addressing regulatory requirements and implementing corrective controls, and managing/minimizing the reputational impact relating to the disclosure of these events.  By implementing policies and procedures to Prevent, Deter, and Detect fraud as part of an overall anti-fraud strategy, companies can work to reduce the likelihood of fraud.

Bates Group has Forensic Accountants, Certified Fraud Examiners and Risk Management Professionals who have assisted companies ranging from Fortune 50 down to small closely held businesses and not-for-profits in addressing fraud risk and designing and implementing anti-fraud programs and controls.  These assignments are often performed as a supplement to a larger compliance review, or at the direction of a regulator.  Considering the negative consequences of a single material fraud incident, it is prudent to invest in preventive controls.   Implementing and maintaining a robust anti-fraud program is more cost effective than trying to recover losses through prosecution or insurance claims.  Additionally, many companies are reluctant to disclose incidents for fear of negative publicity and loss of stakeholder confidence.

Bates has the skills, insight and experience to assist investors by quantifying damages, tracing assets to provide restitution and working with regulators/investigative and law enforcement agencies/insurers to assist in fact finding, identifying internal control failures and assessing their resultant impact on the investors and financial institutions. This includes working with either the investors or class action counsel to prepare proof of claims, assisting in the accurate and timely filing of appropriate tax forms for losses and other support roles and activities.

Areas in which oversight may be lagging behind investor demand seem to be fertile grounds for various types of fraud. Uncovering, preventing and tracking fraudulent activity is an area we believe we can provide valuable assistance to our clients. Our team of experts is ready to assist you in unraveling these complex cases today - please contact us using the information below for more details.


Examples of Bates Groupā€˜s Capabilities

Fraud & Risk Management

Forensic Accounting

A private equity firm with an investment in an energy company sent a team of forensic accountants to review the financial reporting function because their monthly performance reports showed inconsistent results, despite rising costs.  The investigation disclosed that there were no controls over financial reporting and the Finance Director was preparing fraudulent reports to disguise the fact that the plant was losing money.  The Director was replaced and new controls were implemented, enabling the portfolio company to reduce costs, dispose of excess assets and return a profit, ultimately being sold at a profit

SOX Implementation

A hedge fund requested a fraud risk assessment as part of their SOX implementation process.  The team of fraud risk specialists met with members of the legal, finance, investment and accounting departments to brainstorm what possible fraud schemes to which the company might be subject.  We then ranked the client’s perception of the likelihood and potential impact of these schemes and prepared a “heat map” showing the results of these rankings.  The final product was a comprehensive plan, allocating anti-fraud resources to address these threats on a risk-adjusted basis. This enabled the client to use existing resources to gain greater comfort that the fraud risks were being managed effectively.

Contact Bates Group

Bates Group is with you every step of the way. Contact us today for more information on how our End-to-End Solutions can help your firm.

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