It appears that June was my last posting on this blog and much water has flowed under the bridge since then. Holidays have come and gone and a couple of major trials settled. However, the most important event has been the setting up of my own specialist forensic accounting service in October. Those close to me will know that this is something that I have wanted to do for a long long time. The thought of working for yourself can be very daunting, and the security of employment within a big firm can be difficult to give up. however, there are some very good reasons for believing that fraud specialists such as myself can provide a much better service working as a dedicated niche provider.
The main reason is because as a small firm specialising in fraud, white collar crime, money laundering etc it is possible to provide a more focused and professional service within this very specialised field. The trick is to get the balance right. Often in an accountancy firm an expert forensic accountant is encouraged to undertake much more work than he or she can handle alone or with just the help of administrative staff. They must delegate sometimes high level professional work to junior staff in order to achieve the financial gearing typical of the business model within such a firm. This is not to say that the work is not of a very high standard, but together with the city centre overheads involved it can mean that assignments can be very expensive.
Currently and for the foreseeable future the world is experiencing an economic downturn. In the UK some strong measures are being implemented to counter this including substantial reductions in public spending. In the arena of fraud regulation, funding has always been tight, now even more so. If there were not enough funds previously to deal with fraud how will we cope over the coming few years?
For example, before the 2010 general election the Legal Services Commission planned to cut its expenditure on expert witnesses used within criminal defence cases by 20%. Now this reduction could be even more. Already undertaking essential forensic accounting work on behalf of the defence team was becoming unprofitable within any leading forensic accounting team within the market place and rates were under continual pressure all the time. For example, my own rates that I was able to achieve if I had any hope of winning work through competitive tenders had reduced by 40% over a 10 year period (let alone the need for any inflationary rise!). The Legal Services Commission had always said that they expected the work to be carried out by retired accountants and one man bands in future years at rates half of what they had been paying. Of course this situation is unacceptable and threatens access to justice for many – however for me it means that I am able to work at the reduced rates comfortably without city centre overheads and only undertaking work that I have extensive specialised experience of doing.
The same funding problem goes for police and other fraud regulators. In the past I have been unable to service police clients who have required the services of a forensic accountant – as they ought to be doing more often. Using an independant forensic accountant within financial crimes that are being investigated can add substantial strength to any fraud prosecution or asset confiscation under the Proceeds of Crime 2002 case and avoid the opportunity for unreasonable or unopposed attack by a defence expert (potentially such as myself!). However, the police fraud squads and economic crime units are always strapped for funding and the current cutbacks will not help. Again my niche services can provide them with the high quality and properly accredited forensic accounting service that they need at acceptable rates.
Finally there are the victims of crime. I have extensive experience of investigating fraud. When working within the major accounting firms my assignments ranged from medium sized cases to very large ones. Increasingly I was aware that small and medium losses to fraud (say £10,000 to £500,000 or even more) could not easily be dealt with at a cost proportionate to the losses. Very often the victims would be individuals or smaller companies who could not afford the further costs of investigating their losses. The trouble is that investigating fraud can be a time consuming job, and employing a fraud investigator with an open ended cost can mean costs mount up alarmingly. The very large losses experienced by the major corporations, banks and insurance companies will continue to use the very high quality services of the top forensic accountants within the top tier firms – but it is possible to investigate smaller frauds economically using independent experts who can also collate the efforts of the victims and their staff, monitor the effectiveness of any legal advice needed and generally provide a solution to fraud problems at acceptable prices.
Mark Jenner & Co recognises that there is a need to provide very high quality of service to a manageable number of clients – I enjoy being part of any team that enlists my services and strive to add value by recognising where value can be added. Helping with stragtegy can also assist with keeping costs down especially if involvement is early on in any matter. I always say that employing a a forensic accountant who is also an expert in fraud at the start of any case for a few hours or even a day or so in a large case, can save substantial costs down the line. I always make an initial review of any case on a no obligation basis in any case and I can indicate where and when expert accounting or fraud investigation input might be needed, what results might be achieved and how much the cost/benefits will be.
Please visit my business web site for Mark Jenner & Co for a number of articles written about various different aspects of fraud.