Forensic accounting Presentation to Society of Young Solicitors 2006 Jim Luby

1
Forensic accounting Presentation toSociety of
Young Solicitors2006 Jim Luby
2
Types of cases

• Commercial disputes
• Shareholders / minority oppression
• Medical / professional negligence
• Matrimonial
• Fraud investigation
• Personal injury

3
How we can help

• Formulation of claim
• De-construction of claim
• Discovery - whats not there
• Inadequate information flawed conclusions
• Commercial sense
• Investigation / research
• Report / evidence

4
Commodity product-contamination

• 
  Holland UK
• 000 000
• Year 1 150 80
• Year 2 150 80
• Year 3 150 0
• Year 4 150 80
• 600 240
• Loss claimed 360 BUT
• Year 3-no stock (150)
  
• Volume discrepancy (20) (150)
• Real loss 60

5
Shareholder dispute-transport group

• Widow - disenfranchised
• Extensive discovery - investigation
• Overheads excessive - rent and salaries to
  directors
• 000
• Profit per accounts 50
• Excessive rent/salaries
• (director, wife, children) 40
• Capital items 20
• Depreciation (5)
• Personal 10
• Notional tax adjustment (12)
• Revised profit for valuation 103

6
Loss of earnings-employee of multinational

• Actuarys report
• Contracts
• Comparative employee
• Salary - to date / future
• Shift premiums / lump sum for change in shift
  pattern
• Employee bonuses based on company and divisional
  performance - approved profit sharing scheme

7
Loss of earnings-employee of multinational
continued

• Employee cash bonus based on worldwide company
  profits
• Profit sharing contributions to pension scheme
• Reduced pension - lower pensionable salary
• Stock participation plan allowed purchase of
  shares at discount
• Stock options
• Multiplier - adjust for higher tax rate
• Report - revised actuarial report

8
Matrimonial case

• Clear concise report for the barrister/judge
• One page summary of assets, liabilities and
  ownership
• Valuation of husbands shares in professional
  service business
• Research on industry and comparative companies in
  Irl, UK and US
• Opinion on his future earning capacity from the
  business
• Tax based property investment-value of capital
  allowances / holding period/CGT
• Income and tax position of both parties

9
Summary of assets and liabilities
10
Close

• Not all cases - costs / client
• Free confidential initial review
• Get us involved early - facilitates early
  settlement
• A word about actuaries
• Quick response
• Personal attention