Forensic Accountants Bring Value to Claims Investigations

Article, Claims MagazineMarch 2008

Insurance / Forensic Investigation

The role of the forensic accountant and consultant is to verify, corroborate or disprove financial allegations. Steve Rosenthal discusses the ways a forensic accountant follows the transaction trail, and knows how to identify sources of financial and other information to evaluate conflicting information sources.

For the claims adjuster and insurance professional, the services provided by the forensic accountant can have a significant impact on the recovery of an insurance claim, be it first party or third party liability.

At RGL – Forensic Accountants & Consultants we have a multi-faceted insurance support practice, encompassing financial investigation of insurance claims in matters involving subrogation, construction, catastrophe-related claims and more. In every case, we seek to determine whether the documentation, theory or estimates presented in support of the claim comport with the underlying documentation, history and financial context of the subject entity. We summarize and report our findings, and when necessary, provide expert witness testimony in court. This is what we refer to at RGL as ‘getting behind the numbers’ and it’s been the core of our business for 40 years.

In today’s electronic age, our objective remains the same but the methods we employ to extract and analyze information are dramatically different. With an increasing proportion of data in electronic form, our forensic technology practice provides support in our engagements by identifying, extracting and processing electronic data. Focused on the areas of digital evidence recovery, forensic data analyses and disclosure management, RGL’s forensic technology professionals use various tools (hardware and software) to search computer networks for files containing key words. We “image” computer hard drives to preserve, investigate and analyze electronic documents and data files.

The value of our forensic technology practice is particularly relevant in fraud investigations, which almost always involve the calculation of economic damages. Typical fraud engagements include occupational fraud, corporate fraud, vendor fraud, collusion and more.

In addition to fraud, another focus of RGL’s practice is devoted to Catastrophe work in the form of first party property claims. We are retained by the insurance company or their representative, whose policy insures the business that sustained a loss resulting from a catastrophe. Our role is to assist the insured and the insurance company in accurately determining the extent of damages sustained to the property, as well as to measure any time element (business income and extra expense) losses that may have occurred. We also measure the value of any inventory damaged or destroyed in accordance with the terms and conditions of the insurance policy.

Additionally, we monitor from an accounting perspective the repairs and/or replacement of real and personal property damaged or destroyed by the event, and we quantify the economic losses sustained by the insured as a result of the disruption to normal business operations. These losses might include extra expenses incurred to resume operations at the damaged facility or at a temporary location; the loss of profit that would have been earned had the insured event not occurred; and the ongoing, continuing operating expenses incurred during the period of repairs.

We believe there are several factors that differentiate us from our competitors. First, we’re devoted solely to the practice of forensic accounting -- no tax or audit work – which eliminates conflicts of interest that other firms sometimes face. Also, our professionals are among the forensic accounting industry’s most qualified; in addition to being CPAs, many are CFEs, (certified fraud examiners), Cr.FAs (certified forensic accountants) and ABVs (accredited in business valuation). Our professionals also receive extensive training in the discipline of forensic accounting at the RGL Training Institute. Finally, our 22 offices worldwide provide the benefit of immediate access to our breadth of expertise and resources around the globe, allowing us to offer prompt, reliable, and professional forensic accounting services when and where needed.

 

As appeared in Claims Magazine, March 2008.

Author


Additional contributor:
Steven Rosenthal

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