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, targeting its software that helps firms store and search “unstructured data” such as voicemail and email. Within a year, HP identified $5bn fraud case against the founder of the UK software company, Autonomy, claiming that the founder, Mike Lynch, 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) we then identify 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 the Client’s subsidiaries are at risk of being involved in financial statement fraud or not.
• Internal Audit – assess customers’ and vendors’ financial statements, to prevent engaging fraudulent customers and vendors, to prevent risk of NPL and non-performing vendors.
• Insurance Companies – assess customers’ financial statements before granting a letter of guarantee.