Joined by More Cockroaches The recent collapses of First Brands, Tricolor, and other financially distressed companies remind appraisers that inaccuracies in financial reporting can impact the credibility of the calculation or conclusion of value. When industries undergo rapid change, the appraiser’s role could be not only to interpret market data, but also to verify the truth of the financial foundation upon which that data rests. This author shares when and why a forensic accounting engagement is advisable before preparing a business valuation. Introduction Recent news about cockroaches includes pest-related issues like an infestation at a Florida cafe and a San…
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A Business Valuation Expert’s Perspective Drawing from a presentation at the 2025 NACVA BVFL Super Conference by Glenn Block and Greg Clark, this article explores key elements of effective engagement letters, common pitfalls, and practical examples to guide valuation experts in crafting robust agreements. In the ever-evolving landscape of business valuation and forensic accounting, engagement letters serve as a cornerstone of professional practice. As highlighted in the 2025 NACVA presentation by Glenn Block and Greg Clark, these documents are not mere formalities. Rather, they are strategic tools that can protect practitioners, clarify expectations, and ensure compliance with professional standards. Drawing…
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A Case Study In this article, the author uses a case study to explore how forensic accountants used analytics to identify discrepancies in financial records and support financial investigations. Introduction While we traditionally think of forensic accounting as the specialized area of accounting that focuses primarily on the investigation of financial crimes, forensic accountants are also well equipped to help companies untangle financial records when a company suspects financial records are not properly reflected due to errors. Regardless of the nature of the engagement, the use of analytics can help the forensic accounting professional identify areas to investigate and can…
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A New Method of Doing Research The introduction of AI tools has empowered companies to streamline complex tasks, enhance accuracy, and offer real-time insights. One such company, IBISWorld, a leader in industry research, has taken a significant step forward with the introduction of its AI tool, “Phil.” This article explores the impact it will have on professionals working in business valuation, forensic accounting, and business consulting fields. As artificial intelligence (AI) continues to transform industries, market research is one of the fields most poised to benefit from these advancements. The introduction of AI tools has empowered companies to streamline complex…
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Using Forensic Accounting Skills to Your Advantage When valuing a business, one essential step in the process is to review and analyze the subject company’s historical financial information. This information allows a business valuator to analyze the company’s past performance and pinpoint trends in the business to forecast its future performance. The author in this article shares his opinion regarding items that a business valuator may encounter in an engagement that merit normalization. When valuing a business, one essential step in the process is to review and analyze the subject company’s historical financial information. This information allows a business valuator…
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How AI is Transforming the Industry Artificial Intelligence (AI) represents a paradigm shift in the realm of computational capabilities, transcending traditional boundaries of machine functionality to emulate human-like intelligence. AI has made remarkable advances in recent years due to the availability of massive amounts of data, powerful computing resources, and innovations in methods and architectures. This article will explore the role and impact of AI in valuation and forensic accounting, addressing the challenges and issues with AI, and ensuring quality control in using AI. Introduction to AI in Business Valuation and Forensic Accounting Artificial Intelligence (AI) represents a paradigm shift…
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Part IV in a Series Addressing Advances in Forensic Accounting and Financial Forensics The increasing amount of data is daunting. Managing and making sense of the vast amount of information is paramount to professionals. In this article, the author shares how he has managed those first impressions and found value using AI and software to understand the information deluge. In the 1990s, the Rubik’s cube craze had died down, but a new one had emerged: The Magic Eye books. People would flip through these books, which seemed to be pages upon pages of nothing but colorful dots, and perhaps see…
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Part I in a Series Addressing Advances in Forensic Accounting and Financial Forensics The author of this series of articles is co-founder of Valid8 Financial Forensics Software, a Seattle, WA and Boulder, CO-based professional service provider. These articles set forth techniques used to investigate financial fraud allegations and focus on the flow of funds. As 2023 comes into clearer view, it is evident that the changing economic tides will bring a greater emphasis on scrutiny. With interest rates on the rise and recessionary fears growing, the tide is, at long last, going out—and when the tide recedes, we will truly…
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Where to Start? In forensic accounting, whether litigation is contemplated or not, the key to the most reliable conclusion is starting with accurate and complete information. Under the best of circumstances, the primary source of this information is your client. On the other hand, when the person or entity you are requesting from is an adversary, there is little incentive for cooperation. Regardless of the side one is on, this article summarizes the various means of finding assets. In forensic accounting, whether litigation is contemplated or not, the key to the most reliable conclusion is starting with accurate and complete…
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Using Forensic Accounting Valuing the small business is how most valuators earn their living. These small businesses pose as much issues to valuation professionals as they do for tax, accounting, and legal professionals by providing these entities with advice. The issues are wide-ranging, and the purpose of this article is not to patronize small business owners; rather, the purpose of this article is to discuss the challenges we in the valuation community face when valuing small businesses and how forensic accounting techniques can help. [su_pullquote align=”right”]Resources: Forensic Accounting Academy Forensic Accounting Specialty Webinars Forensic Accounting Techniques in Business Appraisals Financial…
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The rudimentary definition of forensic accounting is the application of accounting procedures or practices to a matter that may be litigated. Forensic accounting involves the use of intelligence gathering techniques and accounting/business skills to analyze past financial data. Brittni Langel, CFE for McGovern & Greene LLP, discusses how litigation teams will determine if there is a need to use this information in the courtroom. To read the full article in McGovern & Greene LLP, click: What is Forensic Accounting and How is it Used in Litigation Cases?
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on Business Valuations in Litigation In this article, Paul Fullerman, CPA, CVA, discusses techniques which can assist the accredited valuation professionals performing a business valuation.
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Simple Steps to Save Hundreds of Thousands of Dollars By implementing just a few simple steps and procedures, business owners can catch or prevent financial fraud that can have devastating financial and personal consequences. In this article, Chris Hamilton outlines six simple steps business owners can put into practice today.
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What discount rate should you use? Economic damages in litigation must be reduced to present day dollar values to avoid over-compensating the Plaintiff for harm caused by the defendant. This article explains present value theory in simple terms and addresses different methodologies used in reducing future economic damages to a present day dollar value.
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The digital age represents both forensic challenge and opportunity Forensic financial analysts can increase their effectiveness and value by expanding their training and knowledge in IT forensics.
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It is far broader than forensic accounting While financial forensics may share some common ground with forensic accounting, these professions are far from identical twins. D. Larry Crumbley, CPA, MAFF lays out the differences between these often misunderstood professions and explores the academic factors that may be contributing to the confusion.
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How Forensic Accountants Can Aid Auditors in Risk Assessment Should an assessment of corporate culture be a factor auditors should consider as part of a risk assessment process? These authors think so. Find out why.
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Held at the Hilton Hotel in Washington, DC, the Annual Consultants’ Conference Will Feature 57 Sessions Covering the Highest-Demand Specialty Areas in Financial Consulting The National Association of Certified Valuators and Analysts (NACVA) and the Consultants’ Training Institute (CTI) will collaborate to host the 2013 Annual Consultants’ Conference, June 5–8, 2013, in Washington, DC. Themed “Innovate. Collaborate. Succeed.,” the four-day conference will serve as a forum where ideas, marketplaces, and professionals from around the globe intersect to expand their networks, explore concepts, and share ideas on how to meet the demands of the dynamic and unpredictable world economy. Find out…
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Arbitration Panels Don’t Know Everything a Financial Expert Does. But That Doesn’t Mean You Should Even Consider Talking Down to Them. Arbitration is somewhat similar to a bench trial, but experts need to present opinions somewhat differently than if they were testifying in a jury trial—and this is particularly true with experts testifying on financial issues such as economic damages. Joe Epps explains why.
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The FBI Says it Busted an 18-Person Ring that Spanned 8 Countries and 28 States. Make Up. Pump Up. Run Up. Daniel Gross at The Daily Beast explains: It’s not the latest exercise fad. Rather, according to the Justice Department and the Federal Bureau of Investigation, it’s the three-step process through which an 18-person ring allegedly committed a stunning $200 million credit-card fraud. Here’re the basics of how it worked. Read the full piece at The Daily Beast for all the detail on this scoop: The complaint, which can be seen here, describes what an FBI agent involved in…