Forensic Accounting Technology

When Hewlett Packard bought knowledge management software firm Autonomy, it didn't realize it was buying into a multi-billion accounting cover-up. HP bought Autonomy for $11bn in 2011. Within a year, HP identified a $5bn fraud case against the founder of the UK software company, Autonomy, claiming that the founder inflated the revenues of his business by about $700 million over a two-and-a-half-year period.

When it comes to investigating potential financial fraud, our forensic accountant professionals use a Forensic Accounting Application called ForTech to identify: (i) whether the clients' financial statements pose a high risk of manipulation, and if there is a high risk, (ii) which accounts in the financial statement pose a high risk of manipulation.

This application can be used by many parties, as follows:

• Banks — assess Banks' customer financial statements before lending loans to prevent NPL (non-performing loan).
• Venture Capital / Investors — assess the target companies' financial statements before making investments.
• Accounting Firms — assess audit clients' financial statements to identify red flags of financial statement fraud.
• Advisory Firms — assist clients in the M&A process to identify financial statement fraud risk before acquiring a business or merger.
• Shareholder / Audit Committee — assist in monitoring subsidiary annual financial reports to identify whether subsidiaries are at risk of financial statement fraud.
• Internal Audit — assess customers' and vendors' financial statements to prevent engaging fraudulent parties and mitigate NPL and non-performing vendor risk.
• Insurance Companies — assess customers' financial statements before granting a letter of guarantee.