The data that is provided by the 
client for the purposes of a forensic 
accounting assignment should be 
scrutinized by the forensic accountant. 
The forensic accountant, as required 
by the Standard Practices, has a 
responsibility to “consider the relevance 
of all information that arises during 
the course of a forensic accountant 
engagement.” 

Clients have a 

larger role

At one time, a typical forensic 
accounting engagement might not 
require much from the client save for 
appropriate and relevant background 
information and some assistance with 
locating, accessing and interpreting 
documentation. This has changed 
significantly in the age of data.

If data analysis is to form part of the 
engagement (which is now usually 
a given), understanding the client’s 
complex server setups and data storage 
policies is an important first step. This 
step replaces what used to be a matter 
of simply unlocking a file room door.

respect to the data. For example, data 
for some periods may be incomplete. 
The reliability of data is central and risk 
of data integrity and potential tampering 
is relevant. These concerns need to be 
addressed at the earliest stages.

Once the relevant data is identified, it 
must be checked for completeness. For 
example, a forensic accountant cannot 
state that a full review of all expenses 
was performed if there is no assurance 
that all expense data was received.

Forensic accountants should review all 
information received and consider its 
relevance, reliability and reasonableness. 
If data is not relevant, reliable and/or 
reasonable, the usefulness of analysis 
using that data will be limited.

Data with integrity can be used 
confidently and analyzed and deciphered 
as required. Data analytics (see next 
page) can be used to unlock the 
information contained within data. Now, 
it is a critical capability of a forensic 
accountant to be able to process 
huge amounts of data quickly and 
confidentially using sophisticated tools 
and models. But as always, the need 
for reliability of data is central because, 
as the old saying goes: “garbage in, 
garbage out.”

When the information that could 
arise was limited to boxes of hard 
copy documents, it may have been 
easier to determine the relevance of 
information. Now that electronic data 
is a key component for almost all 
engagements, assessing the relevance 
of information can be more difficult. 
There may be numerous systems that 
have relationships and share data, and 
the client with the forensic accountant 
and/or legal counsel must identify that 
data which might be relevant. This can 
take some deep understanding of the 
relevant systems and/or reliance on an 
individual with the technical expertise 
needed to assist with understanding the 
data and its relevance.

This level of IT granularity may not 
necessarily be a requirement for legal 
counsel, but there is a very clear need to 
understand relevant issues and counsel 
must have input on at least this aspect.

Data integrity

At a minimum, the results of any data 
analysis are only as reliable as the data 
used in that analysis. Counsel should 
be aware of and understand where 
data is sourced and any limitations with 

© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms 
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

At Risk

 

 

|

 

 Volume 7, No. 1 

 

|

 

 23