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Investigative Accounting


These engagements may be performed on behalf of secured lenders under the terms of security, often banks or other stakeholders (e.g. significant creditors, trading partners or prospective investors etc.).

The purpose of the reviews may typically be for one or more of the following reasons:

  • Reviews on behalf of secured lenders under the terms of facility agreements where breaches of facilities may have occurred;

  • Pre-lending reviews on behalf of lenders for new loan facility applications or changes to existing facilities;

  • Assessment of risk in commercial and financial decisions for other stakeholders.

The approach under an Investigating Accountant engagement may also be utilized by management in determining business improvement or turnaround strategies.

An engagement approach will typically involve:

  • Determining the financial position of a company;

  • Determining an understanding of its operating activities, key drivers, and commercial/contractual arrangements impacting financial performance;

  • Understanding any significant events giving rise to recent trading performance;

  • Analysis of historical trading results and generation of and use of funds;

  • Understand and assess:
    – business strategy;
    – financial projections;
    – utilization of available resources/cash;
    – industry issues and any potential future significant impacts for the business;
    – management capacity/capabilities; and

  • Consideration of business improvement options.

The engagements result in the formulation of a strategy or strategies that meet the needs of stakeholders.  In some instances, the Investigating Accountant may be involved in a monitoring process as strategies are implemented.

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