Forensic Friday: The Sherlock Holmes Factor

Anyone who knows me will know that I am an avid reader of Sir Arthur Conan Doyle’s series of Sherlock Holmes novels.  I read them, conservatively, three or four times a year from cover to cover.

I have had cause to read the complete collection of Holmes novels again over the last couple of weeks and was struck by how some of the underlying tenets of Holmes’ approach to investigating apply to those undertaking a forensic exercise or investigation.  You will recall that in my first “Forensic Friday” post that I defined the task of a forensic accountant to be the answering of how, where, what, why and who questions (https://shumpty77.com/2014/08/15/forensic-friday-what-is-forensic-accounting/).

An examination of those questions will involve, necessarily the probing of the factual matrix surrounding the matter in question.  It is here that Sherlock Holmes provides a significant guide to budding forensic accountants in the following quotes:

‘There is nothing like first-hand evidence.’

(from “A Study in Scarlett”)

‘It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.’

(from “A Scandal in Bohemia”)

“Data! Data! Data!” he cried impatiently. “I can’t make bricks without clay.”

(from “The Adventure of the Copper Beeches”)

These quotes combine to form what I call the “Sherlock Holmes Factor” that should pervade all forensic inquiries.  It is simply that one should never draw conclusions before one has received and reviewed all of the data relevant to the investigation.  It is a very easy trap to fall into, in my experience, to commence an investigation with a prejudged position in mind because of what one has been briefed with at the start of the investigation.

Going in with a theory in mind as to what the outcome of the investigation might be will necessary direct your mind to what you are looking for and the questions that you ask.  The danger, obviously, is that you might miss something because you already have your “blinkers” on.  Applying the Sherlock Holmes Factor to forensic enquiries reduces this danger.

Forensic Friday: What is Forensic Accounting?

The most regularly asked question that has been posed to me since I moved into forensic accounting, from those who are not in professional services is, simply, what is forensic accounting?

There are a plethora of definitions but I think this quote (from David Malamed, a forensic accountant from Canada) is a great summary:

“While Forensic Accountants (“FAs”) usually do not provide opinions, the work performed and reports issued will often provide answers to the how, where, what, why and who. The FAs have and are continuing to evolve in terms of utilizing technology to assist in engagements to identify anomalies and inconsistencies. It is important to remember that it is not the Forensic Accountants that determine fraud, but instead the court.”

It is important to realise that a forensic accountant’s role is not to provide an opinion, as noted in the quote above, but to provide, most regularly in report form, a factual statement.  Forensic accountants state facts in report form, to a standard acceptable to the court, often to assist corporate organisations or government agencies investigate a particular allegation that has been made or as part of the litigation process.

There are a number of specific areas in which forensic accountants often work.  Ultimately, however, the work of a forensic accountant can be distilled into two types:

  • litigation support; and
  • investigative accounting.

Forensic accountants are also regularly called upon to provide pre-dispute advice to clients in the context of risk minimization and the deterrence of conduct.

Obviously, this type of work is fast paced and often intricate and that is why I so, already, enjoy it.  In coming posts I will expand on some of the areas in which forensic accountants specialise as well as to explain the techniques used by forensic accountants to undertake the work that they do.

Postscript: If you have any questions or specific topics you would like me to cover as part of this series please do not hesitate to comment as part of this post or drop me an email at the address noted on the About page of this blog. 

Forensic Friday

As some of you will be aware, from my twitter feed (@shumpty77) I have recently transitioned into a new role working in forensic accounting.  Having previously trained as a lawyer and specialised in litigation as well as risk management and insolvency this move presents a natural fit for my long experience in professional services.

One thing that has struck me since I have been “in the chair” is that almost everyone I talk to, in a non work context, are intrigued by what I do however they do not really understand what working in forensic accounting actually means.

That realization got me thinking about presenting a series of blogs on all things forensic (accounting) and thus Forensic Friday is born.

Every Friday I will be posting a blog about an aspect of forensic accounting from topics as diverse as “how to ask questions?” through the dark arts of computer forensics.  I hope these posts are of interest to anyone who want to know a little bit more about what forensic accounts do.

To get things off to a start: I thought I would answer my nephew’s (Tom aged 10) questions about my job.  No I am not a police officer now and I don’t get a set of handcuffs.  No I do not get to interview witnesses in a “special room” (the old one way glass type room).

I look forward to sharing a bit of my job with you in this forum. Now, in the words of Mick Molloy in the excellent “Crackerjack” … “get that sh*t down to Forensic!”.

Postscript: Just for the avoidance of doubt and get the legal stuff out-of-the-way, these blogs are my own work and are not published with any oversight or approval of my employer.  All thoughts, comments and opinions are solely my own.