ACQUISITION INTERNATIONAL ACQUISITION INTERNATIONAL 14 15

SECTOR SPOTLIGHT:
The Changing Role of Forensic Accountancy
August 2012 / / August 2012
SECTOR SPOTLIGHT:
The Changing Role of Forensic Accountancy
The feld of forensic
accounting has grown
exponentially over the
past two decades. It has
become more important
than ever for those who wish
to commission a forensic
accountant to question and
investigate for themselves the
experience and qualifcations
of the frm or individual they
wish to use.
So many frms are hiring one accountant with little or no
forensic accounting experience or credentials and claiming that
they nowoffer forensic accounting services.
Kessler International predicts that the growth of the demand
for forensic accounting and auditing services will also grow
exponentially, as sophisticated frauds and swindles are
increasingly perpetrated worldwide by a progressively more
savvy community.
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Simon is the national Head of Fraud and Financial Crime
at BDO LLP and has over 25 years of fraud, banking and
fnancial crime investigation experience, which involved
the tracing of billions of dollars of assets within over 20
jurisdictions.
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During recent years, and particularly since the onset of the
recession, there has been a change to the role of the specialised
fraud investigator within a forensic accounting practice.
The most notable change is not down to the specifcs of the
actual investigation work, it is around the additional work in
managing reputational and regulatory risk and increasingly,
counselling and supporting the clients through the event.

Corporate entities are often under so much pressure to meet
the varying demands of its diverse stakeholders that they are
Company: Kessler International
Name: Michael G. Kessler
Email: mkessler@investigation.com
Web: www.investigation.com
Address: World Headquarters, 45 Rockefeller
Plaza, Suite 2000, New York, NY 10111
Telephone: 212-286-9100
Company: BDO LLP
Name: Simon Bevan
Email: simon.p.bevan@bdo.co.uk
Web: www.bdo.co.uk
Address: 1 Bridgewater Place, Water Lane,
Leeds, LS11 5RU
Telephone: 0113 244 3839
reluctant to bring in their legal advisors or law enforcement
agencies in the frst instance. They are now more focussed on
risk and reputation management and want to know Who did
it, how did they do it and what can we do now. My role
now often involves more emphasis on the management of the
clients reputational issues.

In the last few years there has been a notable aversion to large
corporate entities reporting fraud. In 2011, reported fraud
decreased for the frst time in over 10 years. Whilst on the face
of it, the decrease appears to paint an optimistic picture and
give an outward impression that our countrys ongoing battle
against fraudis fnally paying dividends, my experience actually
shows a complete different picture.
To me, the message masks the real story of how priorities
within business and in society, in general, are changing. In my
opinion this is also corroborated with the suggestion of giving
prosecutors more discretion around whether to bring a case
to court and whether it would be an effcient use of time and
funds. Fraud is one of the most complex and costly cases to
bring to trial and this move would result in a reduction in fraud
relation prosecutions and a larger focus on the civil courts.

The role of the forensic
accountant from a fraud
and fnancial investigations
perspective is therefore, not
necessarily changing in the
way that we investigate and
the methodologies used, it is
changing in that our services
are widening. In addition to
investigatory services, I am
often engaged to review a
potential risk these days and
offer preventative advice.
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David Alexander is Partner, Head of Fraud & Financial
Crime at Smith & Williamson. He discusses the challenges
faced by Forensic Accountants in the current climiate.
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To survive in an age of austerity, we all have to be smarter
about not only the way we do business but also where we do
business. For some businesses this is refected in the way in
which they approach fraud risk locally and internationally, with
many organisations establishing or formalising in-house teams
dedicated to countering fnancial crime which may affect their
business and mitigating fraud losses.
This provides forensic
accountants with a number
of challenges, as they are
decreasingly used as the frst
line of defence against fraud
or as the frst port of call in
an investigation.
But this also provides opportunities, as forensic accountants
can offer their expertise on increasingly more complicated
business practices, as well as advise on fraud and corruption
prevention controls.
Technology is an example of an increasingly complex area
in countering fraud. Digital evidence is easier and quicker
to access than the traditional physical evidence and a well-
established information technology system is a boon to an
investigation. However, when the fraudster is tech-savvy, and
covers up their digital footprint, expert forensic technology is
required to uncover useful information.
Digital information is not limited to evidence either. Forensic
accountants, on behalf of their clients, use digital information
to support their due diligence investigations for businesses
seeking international trading partners, new locations for
expansion or relocation and to increase their markets beyond
national boundaries. This is to ensure the counter party is
legitimate, has a good reputation and is a partner the business
wants to be associated with.
There is still a risk that due diligence and fraud prevention
is treated as a tick box exercise, but this is where the forensic
accountant needs to demonstrate the value of his expertise
and add value to his clients and their fraud and corruption
prevention strategy.
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Michael G. Kessler is the founder and principal of Kessler
International, the worlds premier forensic accounting and
investigative consulting frm.
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For almost aquarter of acentury, Kessler International has been
the world leader specializing in forensic accounting, computer
forensics, brand protection and corporate investigations.
Established in 1988, Kessler Internationals satisfed clients are
THE CHANGING ROLE
of Forensic Accountancy
comprisedof anextensive anddistinguishedlist of Fortune 500
companies, government agencies, and prestigious law frms
worldwide.
Kesslers diverse staff includes accountants, certifed fraud
examiners, certifed forensic computer examiners, CPAs,
certifed internal controls auditors, former prosecutors,
former law enforcement agents, attorneys, certifed forensic
accountants, , licensed private investigators and researchers.
We remainanindependent, privately ownedcorporationwitha
proven approach that is quality driven, discreet, thorough and
extraordinarily successful. Accounting software is essential for
effcient supplemental data analysis, inquiries and reporting.
Since Kesslers inception in 1988, tremendous gains have
been made in the tools and technology available to Forensic
Accountants.
Keeping up to date with these ensure that clients are receiving
the best possible and most accurate information in an
expeditious manner. While nothing can replace an individual
eye or gut instinct, seasoned accountants know how to
incorporate technology appropriately and effectively, and
Kessler recognizes and incorporates important advances into
their systems regularly.
Advances in computer forensics services enable forensic
accountants to obtain data currently in digital format which in
the past was maintained in paper format.
Company: Smith & Williamson
Name: David Alexander
Email: david.alexander@smith.williamson.co.uk
Web: www.smith.williamson.co.uk
Address: 25 Moorgate, London EC2R 6AY
Telephone: 020 7131 8290
Advances in computer forensics services enable forensic accountants to obtain data
currently in digital format which in the past was maintained in paper format.

Michael G. Kessler