What does a forensic investigation involve?
A forensic investigation is a structured examination of a company’s affairs, records, and transactions to establish the facts. In an insolvency or dispute setting, that usually means tracing assets, reviewing transactions for signs that value was moved improperly, and assessing the conduct of directors and others who controlled the company.
The work can include:
Asset tracing
following the trail of money and property.
Review antecedent transactions
Examine director and officer conduct
including possible wrongful or fraudulent trading.
Reconstructing
financial records where they are incomplete.
Preparing findings and reports
to support recovery, creditor information, or regulatory reporting
What an investigation is not: it is not a fishing expedition or a foregone conclusion. A proper investigation follows the evidence and reports what it finds, including where conduct turns out to have been improper.
Who needs forensic investigation?
Liquidators and judicial managers
who are required to investigate a company’s affairs and report on them.
Creditors
who suspect that assets were moved or that the company was run improperly before it failed.
Companies and boards
that need an independent examination of suspected fraud or wrongdoing.
Lawyers
building or defending a case that turns on what the financial records show.
When is an investigation worth commissioning?
Consider a forensic investigation where there are unexplained losses or missing assets, where transactions in the lead-up to insolvency look questionable, where there are signs of fraud or misconduct, or where a recovery claim needs an evidential foundation. In a formal insolvency, an element of investigation is built into the practitioner’s duties; a deeper investigation is warranted where the early review raises real concerns.
How a forensic investigation proceeds？
1. Defining Scope
We define what needs to be established and the questions the investigation must answer.
2. Gather
Records, transactions, communications, and other evidence are collected and secured.
3. Analyse
Money and asset trails are followed, transactions are tested, and conduct is assessed against what the law requires.
4. Report
Findings are set out clearly, with the evidence that supports them.
5. Act on the findings
The results feed into recovery action, creditor reporting, or a report to regulators, as the situation requires.
Why DHA+ pac
A forensic finding is only as good as the rigour behind it, and only useful if it stands up later. DHA+ pac has investigated company failures and conduct in Singapore since 1994. Our Licensed Insolvency Practitioners approach investigations methodically and report objectively, so the findings can carry weight with creditors, courts, and regulators alike. Where an investigation uncovers recoverable value, it connects directly to our recovery and funding work.
FAQ
Investigation establishes the facts; recovery acts on them. An investigation that identifies a value-stripping transaction or a breach of duty can become the basis for a recovery claim, which in turn may be pursued with litigation funding.
It can. Where the evidence shows conduct such as wrongful or fraudulent trading, the findings can support claims against those responsible, including an order for the court to assess damages against delinquent officers, and, where appropriate, reporting to regulators.
Incomplete records are common in a failure. Part of forensic work is reconstructing the financial picture from the evidence that does exist, including bank records, third-party documents, and transaction trails.
No, and it should not be expected to. A sound investigation follows the evidence and reports the truth, which sometimes is that the company simply failed without misconduct.
Not sure what to do?
If money or assets are unaccounted for, or a company’s failure does not add up, an investigation will establish what happened.
Contact us for a confidential review.