- The impact of COVID-19 on Australian businesses will drive demand for forensic services.
- The incidence of fraud and many types of business disputes is expected to rise.
- Despite remote working conditions, forensic accountants can continue supporting clients.
This quarter’s newsletter points to an array of insightful publications about the effects COVID-19 on the business environment.
Reflecting on that material and recent experience, two insights seem particularly relevant to the field of forensic accounting.
First, the impacts of COVID-19 on the economy and how businesses operate will create demand for forensic accounting services now and in the future.
Second, despite disruptions to their own working arrangements, forensic accountants are continuing to support their clients, employers, and the courts, in relation to investigations, disputes, and other forensic matters.
On the demand side, we can expect a higher incidence of fraud, as risk management controls within many organisations are relaxed or disrupted by COVID-19. For example:
- Changes in supply chains may present opportunities for procurement and accounts payable fraud.
- Remote working arrangements may limit oversight of employees.
- Reduced headcounts and discretionary expenditure in risk management functions may make it difficult to detect fraud.
- New fraud risks associated with government support initiatives such as JobKeeper and early access to superannuation, will also need to be managed.
Parties may also become less willing or able to continue with previous commercial arrangements – leading to a rise in contractual disputes.
Although the causes of previous economic shocks have differed, the aftermath of COVID-19 may be similar. If so, we may see an uptick in many types of disputes, including insolvency-related litigation, insurance disputes, shareholder disputes, and post-transaction disputes.
Fortunately, remote working conditions and other disruptions need not prevent forensic accountants from generating successful outcomes for their clients, employers, and the courts.
Many investigative tasks can be performed remotely, such as collecting and analysing information, which is increasingly held electronically, and conducting interviews by video conference, where appropriate.
Depending on the locations of investigators, persons of interest, and witnesses, it may even still be possible to conduct interviews face-to-face.
Court timetables for some disputes have been extended amid social distancing requirements and other difficulties affecting trials. However, modified court procedures – including the cross-examination of expert witnesses by video link – have allowed other cases to proceed without delay.
Similarly, remote working conditions should not heavily affect the ability of forensic accountants to perform dispute-related work, such as economic loss quantification and the preparation of expert reports.
Even during a major disruption such as COVID-19, there is much that forensic accountants can do, with the assistance of technology, to help clients, employers, and the courts to manage risk and improve dispute resolution. This is truly something to be proud of.
Now, more than ever, it’s important to maintain a strong sense of community in our profession. We continue to invite members to get involved in the newsletter and Forensic Accounting Specialist community. To suggest or contribute an article for future editions of this newsletter, please email us at MyCommunityGroups@charteredaccountantsanz.com.