Wednesday, 12 August 2020

Forensic services

Forensic Services

Hermes Advisory specializes in bankruptcy, fraud, and fact-finding investigations. We link the legal context and the financial facts. We provide input by asking what questions need be answered to satisfy the purpose of the investigation, what type of investigation is best suited to answer those questions, what input can best be provided by you yourself, and how can we optimize our cooperation to achieve the best result.

Hermes Advisory conducts its financial investigations as a party expert (acting on the instructions of a lawyer or trustee in bankruptcy) or as a court expert. We are always aware that the financial investigation must satisfy the client’s need for information and meet the client’s stated objective. This means we offer an unbiased representation of the facts, expressed in clear and understandable words. We also allow for the legal context of the investigation and see that its results correspond with the issue involved, which is often a legal one.

Bankruptcy investigations

Trustees in bankruptcy must generally steer a course between combatting bankruptcy fraud and serving the creditors’ best interests. Funds from the bankrupt estate must be spent effectively and efficiently. This is why the questions formulated in a bankruptcy investigation must serve the interests of the trustee.

Depending on the relevant question, Hermes Advisory can offer the following services:

  1. Quick scan

A quick scan is a small-scale preliminary investigation to establish whether irregularities may have occurred. A quick scan is the most efficient tool available when a trustee suspects irregularities but does not wish to proceed until these have been identified. The results of a quick scan may indicate whether or not proper accounts have been kept or can provide a basis for a follow-up investigation (audit or investigation into specific persons). A quick scan is too general in nature for the results to be used in legal proceedings.

  1. Audit

An audit involves a detailed investigation into potential accounting irregularities over a certain period of time. An audit may focus on the entire bookkeeping system or be limited to a few specific ledgers. Audits are nothing more than fact-finding investigations, for example into whether creditors have been prejudiced in favour of third parties or whether other undue amounts have been paid.

  1. Investigation against persons

Investigations against persons focus on acts or omissions by directors or other officers prior to a bankruptcy. This type of investigation is appropriate when certain officers are suspected of wrongfully withdrawing assets or funds, fabricating expenses, or otherwise committing wrongful acts. An investigation against persons reveals the full background to specific transactions, the extent to which acts performed in that connection may have been wrongful, as well as the identities of the persons involved. The scrupulousness associated with such an investigation – the parties concerned are informed and the findings are communicated to them so that they can give their side of the story – makes it eminently suitable if you intend to use the findings in legal proceedings against the directors or officers concerned.

Fraud investigations

Approximately 50% of all Dutch businesses have been defrauded in one way or another at least twice in the past two years. Goods have been stolen, invoices falsified, numbers and sales targets manipulated, funds embezzled, unauthorized transactions performed, and so on. And once fraud has been discovered, questions arise about how it could have happened, who were involved, which internal procedures were violated, what loss and damage has been caused, and how future incidents can be avoided.

We at Hermes Advisory can support you in investigating fraud and taking steps to repair the damage and avoid similar incidents in the future. We can also advise you on how best to communicate to supervisory bodies and authorities and what follow-up action you should take.

Fact-finding investigations

Even if there is no question of any fraud or suspicion of fraud, certain events – for example disappointing financial results related to a project or business activity – may require an explanation. Minor decisions can have major consequences. Who was involved? Who was responsible? Did they weigh up the pros and cons properly? Have any laws, regulations, or internal procedures been violated? What is the financial impact?

We can analyse and reconstruct the facts and circumstances that have led to a particular situation and bring the causes and effects to light. A fact-finding investigation can show whether someone is liable, whether the business has sustained a loss and, if so, how much. An in-depth fact-finding investigation also helps define the measures that you can take to repair the damage and avoid new mistakes in the future.

For more information or a preliminary consult, please contact Olav Nuijten (+31 6 28 55 33 72) or Inge-Lisa Toxopeus RA (+31 6 240 90 270).