The suit as sleuth

In an increasingly litigious climate, forensic accounting is where the action is. And it can be glamorous, says Barbara Lantin

If there's a glamour end of accountancy, it is surely forensic accounting. What other department sends its partners across the world on undercover work involving seven-figure frauds? Formerly known more prosaically as "litigation support", this is indubitably where the action is.

And it is burgeoning. All the Big Six and most of the next tier have substantial forensic accounting departments and they have recently been joined by a couple of new specialist kids on the block - one of them the European headquarters of Canada's largest independent financial investigators.

"Litigation support work has been going on for years," says Rick Helsby, partner in charge of forensic accounting at Coopers and Lybrand. "But given the fact that we are now in a much more litigious climate, the call for forensic accountancy has dramatically increased over the past four to five years and this trend shows signs of continuing." His firm now employs 50 in London and half that number in the regions.

"It's a curious area because although all the big firms use the phrase 'forensic accounting', people often ask what it means. I would describe it as being all about the resolution of disputes. When you have two warring parties, the role of the forensic accountant is to provide expert business advice which will support one party's case."

Forensic means literally "connected with or used in courts of law", though of course a vast majority of cases settle out of court. The brief is wide and may involve estimating loss of profits in contractual disputes and insurance claims, fraud investigations of all kinds, tax and duty work, money tracing, competition matters and business valuations.

Much of the work is international on a US/UK/European axis and practitioners stress the importance of a sound contact base overseas. One firm of forensic accountants was called in by an Eastern European government after the collapse of Communism, to trace the millions spirited out of the country by its former head of state. Staff travelled half of Europe in their search.

Not all jobs have this glamour. Forensic accountants may be called in before a fraud is even alleged as when Coopers was asked to computer scan the National Power/PowerGen share issue for possible multiple applications. Instructions come directly from the client or through solicitors. If a case reaches court the accountant will appear as an expert witness.

The huge rise in fraud over the past few years has accounted for much of the growth in business. Martin Foster, UK head of forensic accounting at KPMG, lays some of the blame for this rise on the pressure on employees to perform. "Corporations take layers out of management and that tends to open up opportunities for people to beat the system. Sometimes this is for personal gain but sometimes there is no direct benefit other than the appearance of delivering better results to bosses than is actually the case."

To deal with the investigations side, most firms have brought ex-policemen on board, often of senior rank. If the services of an investigation agency are needed, it is their job to supervise the agency's work. However, because this is a totally unregulated field, a couple of practices have decided to establish a formal link with a particular agency in order to ensure control, confidentiality and conformity of standards. Others are considering following suit.

For the first few years of the forensic accounting boom, the Big Six had it pretty much all their own way. Martin Foster of KPMG emphasises the value of being able to draw on specialists from other departments in the firm. "It is very useful to be familiar with particular types of investigation or certain areas of industry so you know exactly what you are looking for. You also need investigative and interviewing skills, tenacity and an eye for detail."

So can the two newcomers on the scene compete? Definitely, says Monica Bond, who heads the new London office of Lindquist Avey. "I can draw on the resources of any of 250 specialist forensic and investigative accountants in the Lindquist Avey group internationally and I complement the permanent staff in the London office with consultants who are specialists in a particular field on an ad hoc basis.

"The advantage of a specialist practice is that while auditors look at the figures, we look behind them. I see it from the instructing solicitor's viewpoint. They need specialists within the specialism." For this reason Ms Bond has taken on experts in white collar crime, intellectual property, tax and customs and computers - and is planning to expand her team.

David Lee at Lee and Allen is aware that as a small niche practice his firm lacks the infrastructure of its competitors. "On sheer numbers we can't compete and nor would we want to. We are very case-driven: we are not interested in managing a great big body of people." To acquire the necessary breadth of experience, the firm - launched last year by David Lee, former head of special investigations at Price Waterhouse, and his colleague Tim Allen - has set up a banking panel composed of independent consultants with expertise in different fields including derivatives, foreign exchange and investments. "This gives us great flexibility. It is more powerful than being tied to people in-house."

Clients may prefer to use their own accountants for forensic work, says Rick Helsby of Coopers and Lybrand. "A client's own accountant will already understand the needs of his particular business, which somebody called in by a solicitor is unlikely to do." However the truth - as Mr Helsby admits - is that his firm is unable to take on between 20 and 40 per cent of the forensic work it is offered because of conflict of interest.

It was precisely this problem which led to the departure of Messrs Lee and Allen from Price Waterhouse. David Lee says: "It was very frustrating being asked by regulators, prosecutors or lawyers to act only to find that we were conflicted out because some of my partners were offering litigation, tax or auditing services, or selling them computers. Our aim is to be the seventh alternative for this sort of work, behind the Big Six. Because we can work on an unconflicted basis we believe there is ample room in the market for us."

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

The Banksy image in Folkestone before it was vandalised
Life and Style

Sales of the tablet are set to fall again, say analysts

football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
Brian Harvey turned up at Downing Street today demanding to speak to the Prime Minister

Met Police confirm there was a 'minor disturbance' and that no-one was arrested

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010

George Lucas criticises the major Hollywood film studios

Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'

Does Chris Grayling realise what a vague concept he is dealing with?

Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Life and Style
The charity Sands reports that 11 babies are stillborn everyday in the UK
lifeEleven babies are stillborn every day in the UK, yet no one speaks about this silent tragedy
Blackpool is expected to become one of the first places to introduce the Government’s controversial new Public Space Protection Orders (PSPOs)

Parties threaten resort's image as a family destination

Life and Style
Northern soul mecca the Wigan Casino
fashionGone are the punks, casuals, new romantics, ravers, skaters, crusties. Now all kids look the same
Life and Style

I Am Bread could actually be a challenging and nuanced title

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Customer Service Executive / Inbound Customer Service Agent

    £18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

    ASP.NET Web Developer / .NET Developer

    £60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

    Operational Risk Manager - Asset Management

    £60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

    Project Coordinator - 12 month contract

    £27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

    Day In a Page

    Two super-sized ships have cruised into British waters, but how big can these behemoths get?

    Super-sized ships: How big can they get?

    Two of the largest vessels in the world cruised into UK waters last week
    British doctors on brink of 'cure' for paralysis with spinal cord treatment

    British doctors on brink of cure for paralysis

    Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
    Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

    Salisbury ranked seventh in world’s best tourist cities

    The city is home to one of the four surviving copies of the Magna Carta, along with the world’s oldest mechanical clock
    Let's talk about loss

    We need to talk about loss

    Secrecy and silence surround stillbirth
    Will there be an all-female mission to Mars?

    Will there be an all-female mission to Mars?

    Women may be better suited to space travel than men are
    Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

    'They poured water on, then electrified me...'

    If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
    James Wharton: The former Guard now fighting discrimination against gay soldiers

    The former Guard now fighting discrimination against gay soldiers

    Life after the Army has brought new battles for the LGBT activist James Wharton
    Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

    Panic over Ebola threatens to infect the midterms

    Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
    Premier League coaches join the RSC to swap the tricks of their trades

    Darling, you were fabulous! But offside...

    Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
    How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

    How to dress with authority

    Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
    New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

    New book on Ian Curtis sheds fresh light on the life of the late singer

    'Joy Division were making art... Ian was for real' says author Jon Savage
    Sean Harris: A rare interview with British acting's secret weapon

    Sean Harris: A rare interview with British acting's secret weapon

    The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
    Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

    Tim Minchin interview

    For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
    Boris Johnson's boozing won't win the puritan vote

    Boris's boozing won't win the puritan vote

    Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
    Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

    Tim Wheeler: Alzheimer's, memories and my dad

    Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album