IEF can provide financial assessments or investigations to illustrate how a company may have been affected by specific transactions or events.
IEF can provide analyses of financial statements and other accounting information to clients interested in gaining a better understanding of:
- Assessments of accounting profitability and economic profitability of a company, investment or project
- Analysis of balance sheet metrics, including capital adequacy, risk-adjusted return on capital, short- and long-term funding requirements
- Analysis of complex capital structures and company leverage
- Liquidity and solvency assessments
- Assessment of appropriate post-acquisition price adjustments under SPAs arising from discrepancies between the expected and actual balance sheet or working capital values
These assessments of company financial and accounting data can help to illustrate a company’s performance over time or show how a company may have been affected by specific events.
Our experts have undertaken detailed accounting investigations and assessments of accounting irregularities arising in the context of dispute resolution, such as:
- Interpretation of accounting standards and assessment of the propriety of accounting treatment for specific transactions under various accounting standard setting regimes, including International Financial Reporting Standards (IFRS), US GAAP and UK GAAP
- Investigation and analysis of allegations of fraudulent or false accounting
- Analysis and tracing of funds and transactions
Some recent projects have included advising on issues such as:
- Analysis of the profitability of a gas contract. This involved the investigation of accounting data covering direct revenues and costs and indirect costs.
- Tracking the value of a property development project attributable to an individual entity through a set of complex equity structures and loan agreements.
- Analysis of financial data to determine the cost of the residual element of a disputed contract covering engineering design work for a LNG plant in the Middle East.
- Financial investigation of the level of investment in a metals mining and refinery asset in Central Asia and the profitability of the investment under various scenarios.
- Review of the financial and accounting metrics of a French and Belgian bank in receipt of State Aid. Analysed the bank’s financial and accounting data to verify that the bank was meeting the required targets for the European Commission.
- Assessed the accounting impact of fraudulent structured financial transactions of large bankrupt energy-trading firm including quantifying increase in losses, changes in outstanding debt, and effect on key accounting ratios. The analysis was used in litigation brought by the company’s debt holders.
- Assessed the financial position of a company facing a large fine from a competition regulator. Provided advice on the scale of any potential fine the company could absorb and remain competitive.
- Analysing the profitability of bank products and customers for a number of banks in commercial and regulatory contexts.
- Financial analysis and due diligence of a critical supplier for an oil major. The supplier was one of a small number of potential suppliers for a critical service required by the oil major. The supplier’s balance sheet was relatively weak. As such, assessed the relative risk of extending new contracts to the supplier versus not doing so.
- Investigation of alleged manipulation of profits and fraud by a joint venture partner for the purpose of falsely inflating purchase consideration due pursuant to the exercise of a put option. Assessed the validity of, and the propriety of the accounting treatment of, certain transactions recorded in the financial statements.
- Advising a client in relation to alleged fraudulent misrepresentation by its joint venture partner, involving a detailed review and analysis of contemporaneous correspondence, management accounting information and financial statements relating to the operations of the venture.
- Assessment of a company’s recorded revenue and the propriety of its revenue recognition policies in light of contemporaneous applicable accounting standards and regulation.
- Analysis and tracing of several thousand transactions through a large number of bank accounts in order to assess the net losses arising to a client of a retail bank following an alleged misuse of a power of attorney.