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Hovland Forensic

Financial Statement Examination Investigation

Balance sheets that lie, income statements that hide, footnotes that mislead, our forensic CPA exposes every distortion before it costs you millions.

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Numbers Can Be Manipulated

Revenue recognized too early, expenses parked off-book, or comparables cherry-picked, GAAP violations can shift value by seven figures. We dissect statements line-by-line and translate findings into plain English.

What We Examine

  • Revenue recognition timing & phantom sales
  • Hidden liabilities and understated reserves
  • Off-balance-sheet entities and related-party transactions
  • GAAP compliance gaps
  • Cash-flow vs. net-income anomalies

Methodology Timeline

Ratio analysis and Benford tests highlight irregularities.

Reconcile ledger detail to footnotes, test sample transactions, and benchmark against industry norms.

Calculate misstated earnings, hidden debt, and adjusted valuations.

Deliver executive memo + fully referenced workbook ready for deposition or settlement.

Results Delivered for Clients

HOA Dues Theft

Management company was stealing homeowner’s dues from absent homeowners. Management company transferred funds directly from HOA bank account into their account. HOA collected on insurance policy due to fraud, management company was referred to the State for prosecution. 

Employee Embezzlement

Longtime employee was stealing customer payments on AR. Forensic tracing of timestamped reports and customer receipts clearly showed how employee was working the scheme. Employee took plea deal with DA.

Industry-Sourced Insight: ACFE Fraud Statistics

According to the “Occupational Fraud 2024: A Report to the Nations”

  • Organizations lose 5% of revenue to fraud each year
  • Median loss per case is $145,000
  • Typical fraud case lasts 12 months before detection
  • The longer a fraudster has worked for an organization, the more costly their fraud
  • More than half of occupational frauds occur due to lack of internal controls

With losses this huge nationwide, every missing dollar hurts, see how defensible evidence flips the odds and protects what’s yours.

What is a financial statement examination in forensic accounting?

A targeted forensic review of balance sheets, income statements, and cash flows to detect manipulation, errors, or fraud (e.g., revenue inflation, off-book liabilities). Unlike audits, it focuses on specific risks with procedures tailored to suspicions or legal needs.

How do forensic accountants conduct a financial statement examination?

We apply analytics (e.g., ratio analysis, Benford’s Law), vouch transactions, trace reconciliations, and test internal controls. Results in a detailed report compliant with AICPA/SSAE standards, suitable for courts or stakeholders.

When is a financial statement examination necessary?

Critical for M&A due diligence, shareholder disputes, lender reviews, bankruptcy filings, or post-fraud probes. It uncovers hidden issues early, preventing losses and supporting claims for damages or restitution.

What statements do you need?

Three years of audited/unaudited statements, trial balances, and supporting schedules.

Is the investigation billed hourly or flat-rate?

We work exclusively at a transparent $250 per hour. 

Expert testimony included?

Yes, our CPA has testified with zero exclusions.

Ready to Expose the Truth?

Book Financial Statement Review