Forensic Accounting Engagements
Nearly all of our services are provided under fixed fee arrangements. In larger matters, we may have “phases” to our work, since it is sometimes difficult to determine the complete scope of the project up front. After we have had a chance to examine the available documentation and consider the scope of the work, we will provide the client with a fixed fee. Be assured that we will not begin work on the project until the client has agreed to the scope of work and corresponding fees.
Our minimum retainer is typically P5,000 to P10,000, with larger deposits required for larger engagements. We normally require a deposit of at least 50% of the project fee prior to beginning work, with the balance due in full before the expert report is provided to the retaining client or attorney. For engagements with shorter deadlines or unusual circumstances, we may require the entire fee up front.
Our consultation typically involves both the attorney or any other party involved and the client involved in the litigation or fraud matter. We want to understand the case, the specific services that are needed, and how our financial analysis and expert witness testimony can help the case. We will then make our recommendations, offering a range of services and corresponding fees.
Tracy’s specialties include:
- Investigation of corporate frauds
- High net worth divorce with complex financial issues
- Defence of criminal tax fraud and other government financial investigations
- Investment fraud, including Ponzi schemes and misappropriation of assets
- Calculating damages resulting from breach of contract
Forensic Accounting, Fraud Investigation, and Expert Witness Services
EXPERT WITNESS SERVICES
SPEAKING AND TRAINING
Chauke & Co Forensics. provides litigation support and forensic accounting services for both the prosecution and defence of civil and criminal matters. The work is focused on assisting in financial disputes, and includes analysing evidence, managing documentation, calculating financial losses, and reporting findings in reports that are easy-to-understand.
Accountant’s Professional Liability
We can evaluate the work of Certified Public Accountants when fraud was not uncovered or the professional standards were not followed. Our services leverage our auditing, accounting, and fraud knowledge to help evaluate the work done by auditors and accountants during financial statement audits, financial statement reviews, and compilation engagements.
Chauke & Co Forensics. has completed numerous engagements related to accountants’ malpractice. We can evaluate your case to determine whether a malpractice claim is viable, render opinions on whether the CPAs complied with applicable professional standards, and give expert witness testimony.
Our understanding of fraud and the methods used to commit fraud provides a solid basis for examining cases when auditors and accountants may be at fault. We can examine engagement agreements to determine the scope of work of the accountants or auditors, review work papers and analyse deficiencies, and consider relevant accounting standards (Generally Accepting Accounting Practices – GAAP), auditing standards (Generally Accepting Auditing Standards – GAAS), and other applicable rules and regulations.
- Analysis of the fraud to determine amounts, methods, and perpetrators
- Review of engagement agreements to determine the appropriate scope of work by the accountants or auditors
- Examination of accountants’ work papers and analysis of deficiencies
- Examination of relevant accounting standards (Generally Accepting Accounting Practices – GAAP), auditing standards (Generally Accepting Auditing Standards – GAAS), and other applicable rules and regulations
- Preparation of an expert report and testimony in court proceedings
Bankruptcy and Reorganization
Our experience with distressed companies includes consulting with debtors or creditors throughout the bankruptcy and/or liquidation process. We can also advise companies through successful bank workouts. Our experience includes a wide variety of industries, so our bankruptcy and reorganization work is not limited to a specific industry.
Chauke & Co Forensics’ forensic accounting expertise is important when looking “behind” the numbers. We dig into the details to understand how and why a company is in its current financial situation, and develop creative operating alternatives for digging out of the financial hardship.
We can help companies prepare accounting reports for bankruptcy filings and comply with the many accounting-related disclosure requirements.
- Analysing the operating history of the company
- Evaluating the current solvency of the company
- Identifying opportunities for increasing revenue, decreasing costs, and restructuring the business
- Projecting revenues, expenses, and cash flow under a variety of operating scenarios
- Evaluating legal alternatives from a financial standpoint
- Working with counsel to establish a viable operating plan
- Investigating allegations of fraud in the bankruptcy process
Contract Disputes, Damages, and Lost Profits
Chauke & Co Forensics. has experience calculating lost profits and other damages for a wide variety of disputes, including commercial construction, fair dealership, equipment failures or accidents, supplier-purchaser disputes, and financial disputes involving negotiable instruments and secured transactions.
We are adept at calculating lost revenues, lost profits, lost opportunities, and unjust enrichment. We can also include an examination of the company’s operating history and current industry conditions, including an evaluation of economic conditions of the market, as well as other factors that may or may not contribute to financial losses.
Disputes over commercial contracts commonly occur in the normal course of business. When contracts are broken and economic damages are suffered, Chauke & Co Forensics. can help calculate both simple and complex damages.
Corporate Fraud and Embezzlement
Employee dishonesty can occur at all levels of a company, but the most costly frauds are committed by executives and upper management. Suspected frauds need to be investigated by an experienced forensic accountant, especially if the fraud was committed by a member of upper management. It is impossible to know the full extent of the theft and dishonesty without a fraud examination.
Stephen has examined many cases of fraudulent financial statements, embezzlement or employee theft, purchasing and procurement schemes, kickback and bribery schemes (both private and public sector), fictitious vendors or shell company schemes, theft of accounts receivable or accounts payable, pay-and-return schemes, excess charges by subcontractors, personal use of company resources, and expense reporting fraud.
Chauke & Co Forensics. will conduct an examination to determine whether a fraud occurred, who was involved, how the fraud was committed, and how much has been lost. Tracy specializes in making financial frauds understood by non-accountants, and she will assemble the relevant documentation in a format that will be understandable and useful in the event of civil or criminal prosecution.
Divorce and Family Law
Spousal disputes, particularly divorce situations, frequently involve allegations of misappropriation of funds. The experience of a fraud examiner can be an important asset to your investigation and litigation.
We perform confidential investigations at the request of a spouse, using only legal means to gather information and documentation. Chauke & Co Forensics .’s divorce services include analysis of the source and use of funds, searching for unreported income, lifestyle analysis, dissipation claims, analysis and identification of property ownership, examination of business interests, and reconstruction of business books and records.
has been qualified as an expert witness in multiple state and federal courts, and has been retained in both civil and criminal cases. Although her practice has been concentrated in the Milwaukee, Wisconsin and Chicago, Illinois areas, she has worked cases across the United States and is available for retention in any state.
Chauke & Co Forensics. provides expert witness services in a variety of industries and with a variety of cases. Our services are not industry-specific. We have completed professional engagements in a wide variety of industries including manufacturing, professional services, health care, insurance claims, retailing, investment management, banking, mortgage processing, non-profit, and construction. Our specialty is in providing expertise related to corporate fraud and embezzlement, tax fraud, divorce and family law, financial statement fraud, insurance fraud, pyramid schemes, and white collar criminal defence.
We can be involved at any stage of the litigation process, including strategic consultation, investigation, document examination, deposition, and trial.
Stephen has impeccable credentials and is adept at making financial matters understood by non-accountants, and has an ability to connect well with judges and juries. She has testified at deposition and trial more than 50 times, and has personally investigated hundreds of frauds.
Financial Statement Examination
Chauke & Co Forensics. examines and evaluates financial statements, related schedules and notes, and other public company filings for potential red flags of fraud. During this examination, we will evaluate the quantitative and qualitative aspects of the financial statements and related filings. Our work with investment analysts and other interested parties is done on a confidential basis.
Specifically, we may identify:
- Incomplete disclosures or failures to disclose
- Misleading financial information or disclosures
- Unusual relationships between financial statement items
- Relationships between insider trading of securities and financial disclosures
- Inappropriate application of Generally Accepted Accounting Principles (GAAP)
- Issues such as revenue recognition, improper capitalization, and inadequate reserves
- Material misrepresentations and omissions
- Potential irregularities in financial statement data
Chauke & Co Forensics. has extensive experience examining financial statements and related filings, and can put this experience to work with a detailed examination of a company’s SEC filings. Our depth of knowledge and experience related to financial statement fraud enhances this process.
Financial Statement Reconstruction
Chauke & Co Forensics. is frequently retained to reconstruct financial statements from source documents. This includes bank statements, credit card statements, investment account statements, invoices, and other financial documentation.
When accounting records are deemed unreliable, the most effective and efficient way to get to the bottom of a company’s finances is by doing a ground-up reconstruction of the financial statements.
Government Investigations (Defence)
Chauke & Co Forensics. examines and evaluates insurance claims on behalf of claims examiners, public adjusters, and insurance company investigators (SIU). We have assisted with hundreds of insurance claims, recalculating insured losses and examining claims for evidence of fraud.
Specifically, we can calculate loss of net income, continuing operating expenses, and extra expenses. We also examine the financial and operating data for claims that are under suspicion of fraud. Our fraud experience related to commercial insurance claims includes the examination of claims for losses that did not occur, analysis of overstated claims, and the examination of financial motives for arson.
Our services can include:
- Survey physical damage to determine the extent of business interruption during restoration, and estimate the period of interruption
- Analyse sales and production records to determine pre-loss activity and projected activity, had the loss not occurred
- Determine actual loss sustained based upon sales made up, fulfilment of demand with quantities on hand, and potential purchase and resale of products
- Perform calculations related to the asserted loss, and determine if the assertions are reasonable
- Analyse inventory levels to determine the accuracy of inventory levels reported prior to the loss
- Examine claims to determine if evidence of fraud exists
- Examine the financial condition of a business or individual to determine if a financial motive for arson exists
Internal Investigations & Regulatory Compliance
Independent internal investigations are a critical piece of regulatory compliance efforts at domestic and multinational companies. Investigations can (and should) be done to enhance internal compliance and ethics policies, as well as to examine potential violations of criminal and civil codes.
Whether a company is facing allegations of malfeasance, potential civil or criminal actions, or accusations related to violations of regulatory codes, independent expertise is critical. Not only is Chauke & Co Forensics. skilled in high-stakes investigations, the company rarely encounters conflicts of interests in its work. Because we are so small and our work is so focused, you can be assured that we have no conflicts related to continuing audit engagements, ongoing legal work, or other client relationships which interfere with our independence.
Chauke & Co Forensics. provides independent guidance in internally and externally initiated investigations, securities litigation, corporate governance, regulatory compliance, business intelligence and financial reporting. Specifically, we provide guidance on critical regulatory compliance issues such as SEC examinations and SEC enforcement actions, Foreign Corrupt Practices Act (FCPA), antitrust violations, anti-money laundering (AML), Sarbanes-Oxley (SOX), and audit committee investigations.
Stephen’s forensic accounting and fraud investigation experience serves as the foundation to provide comprehensive services to clients to reconstruct financial data, investigate allegations of misconduct, gather evidence in response to regulatory inquiries and actions, and report the findings to management, boards of directors, regulators, judges, and juries.
Investment and Ponzi Schemes
A Ponzi scheme is an investment scam which promises extraordinarily high rates of return and often has questionable business activities. The returns paid to investors come from cash invested by new investors. The scheme must consistently grow in order to continue to fund the “interest payments” to investors, especially since the promoters usually skim substantial sums of money from the schemes for their own use. Eventually, the Ponzi scheme collapses when the promoters cannot generate enough new cash to keep the scam going.
Chauke & Co Forensics. investigates Ponzi schemes on behalf of defrauded investors, tracing the flow of funds and searching for assets that may be recovered to reimburse investors for their losses.
Misappropriation of Fiduciary Duty
When an individual misuse her or his authority and power to cause financial losses for another, Chauke & Co Forensics. can help calculate the losses. We will conduct a fraud examination to determine the extent of the losses, if any in cases involving management fraud, trustee or power-of-attorney fraud, fraud or deception by family members, and shareholder, director, and officer fraud.
As with our other fraud-related services, our firm will conduct an examination to determine what funds are missing, the disposition of the funds, or what business losses were created. The analysis may include reconstruction of the books and records, as well as identification of questionable income and expense items.
Chauke & Co Forensics. has extensive experience tracing money moved with high volumes of transactions and through multiple bank accounts. Following fine grain details with a high degree of accuracy is crucial in these investigations. We can manage cases with hundreds of bank accounts and hundreds of thousands of transactions, effectively tracking the flow of funds between people, organizations, and accounts.
Pyramid Schemes and Multi-Level Marketing (MLM)
When shareholders of closely held businesses disagree about the numbers, someone has to sort them out. It is important to have an experienced expert witness evaluate the claims and the documentation, especially when allegations of fraud surface.
Chauke & Co Forensics. can assist with damage calculations and other money matters during buyouts or litigation. Specifically, Stephen’s experience as a fraud examiner is useful when conducting financial investigations and fraud examinations.
Our experience providing services related to shareholder disputes includes involvement in engagements regarding misappropriation or theft of company assets, misappropriation of fiduciary duty, and dissenting stockholder suits
Our experience on behalf of shareholders also includes securities litigation. We can complete a detailed analysis of the trading within a shareholder’s account to determine gains, losses, types of trading, income and expense. The culmination of our work is a damage calculation and expert witness report with supporting documentation.
Tax Controversy and Tax Fraud
Chauke & Co Forensics. provides expert assistance in resolving both civil and criminal tax matters. Tax cases are very often based upon complex assumptions made by taxing authorities regarding a taxpayer’s income and expenses. Those assumptions are many times made without a full analysis of all available data, but the burden of proof rests with the taxpayer. Many times the cases involve large quantities of financial documents that need a thorough analysis.
The taxpayer is generally at a disadvantage in tax matters due to the lack of expertise regarding financial documentation, estimation methods, and tax law. Chauke & Co Forensics. has the experience required to effectively challenge the taxing authorities on their calculations and proof of income and expenses.
As a Trained professional of the Federal Law Enforcement Training Centre’s Criminal Investigator Training Program, Stephen has training and experience with financial analysis methods utilized by federal and state taxing authorities for both civil and criminal tax matters.
Chauke & Co Forensics. can analyse the government’s case theory and point out the strengths and weaknesses in the case. Specific assistance provided may include:
- Completion of a financial analysis early on to determine risks in the case
- Organization of accounting information and evidence
- Reconstruction of financial documentation to determine income and expenses
- Assistance with the development of technical defences
- Analysis of calculations and methods used by the government
- Application of direct and indirect methods of calculating income, including lifestyle analysis, net worth analysis, bank deposit analysis, and source and application analysis
- Assistance with interpreting and applying the tax code to specific income and expense items (often to rebut the interpretation and application suggested by the government)
- Expert witness testimony
- Calculation of the tax loss to assist in sentencing
Our examination will be conducted to best address issues being pursued by the government. We review calculations and assertions made by the taxing authorities, render an opinion, and if necessary, provide evidence to challenge the government’s position. Alternatively, we have the ability to conduct an independent examination of available documentation to calculate items in question for accuracy and correct application.
White Collar Criminal Defence
Chauke & Co Forensics. provides forensic accounting services to assist with criminal defence. Defendants are entitled to a competent defence, and that may often involve a detailed analysis of complex financial transactions.
Our firm has the capability and experience to analyse the documentation and numbers with integrity and objectivity, in order to present the facts accurately to assist with the defence of the client. More importantly, Chauke & Co Forensics. can often intervene and assist with an investigation prior to the filing of charges, so as to possibly avoid a criminal charge.
We have experience managing large volumes of data in cases with complex scenarios, and have successfully evaluated causation and damages in a variety of industries. We can be involved at any stage of the litigation process, including strategic consultation, investigation, document examination, deposition, and trial.
Stephen’s strong background in forensic investigations and fraud examinations is topped off with skilled deposition and court testimony, having been named as the expert in hundreds of matters in State and Federal courts. Her hands-on approach to the investigative process is rewarded with a thorough, first-hand knowledge of the documents and data, which translates into credible expert witness testimony.