Jeff Cone has assisted a wide variety of law firms and clients, including national and international law firms and clients; as founder of the Cone Consulting Group in Portland, Oregon, Jeff speaks to us about forensic accounting and why attorneys should seek out a forensic accountant.
As a CPA why have you focused on Forensic Accounting?
After doing audits for 10 years with what is now known as the Big Four accounting firms, I became increasingly comfortable working with attorneys on matters involving complex financial information. I can usually come up with creative approaches to complex issues and strategies that are helpful in litigation and criminal proceedings.
Have you ever testified regarding accounting matters?
Yes. Testifying about forensic accounting matters can be challenging due to the constraints of the Q&A format of trial and the need to present complex financial analyses and findings. Attorneys need to make sure their forensic accountant is adept in this environment.
Can you give us an example of where you had significant impact?
An executive was accused of embezzling one million dollars from a company leading to its demise. The accusations were based on deficient forensic work where government accountants “cherry-picked” transactions that they concluded represented embezzlement. I performed a comprehensive analysis of the executive’s personal bank and credit card activity and demonstrated that no funds were actually embezzled.
That is interesting, how can that have occurred?
First, the government accepted the company’s allegations without proper skepticism. They found suspicious looking payments to the executive and without adequate investigation they concluded that it represented theft by the executive. My comprehensive review of the executive’s personal accounts revealed that most of these payments represented the repayment of short-term loans or for expense reimbursement that was not well documented, but still legitimate. This involved compiling bank and credit card statements for several years and reviewing thousands of transactions.
This involved working with significant amounts of data. Do you often work with large volumes of data?
Absolutely, I assisted in a matter that involved approximately 40 million timecard entries, from two different timecard systems, for a supermarket chain involving allegations that employees were not being given sufficient break times. I was able to help the attorneys quantify the scope of the problem that led to the settlement of the matter.
Should an attorney involve forensic accountants in the discovery process?
Yes, forensic accountants can be very helpful during discovery to make sure all the relevant accounting and underlying electronic data is either requested or produced. I have helped in both framing discovery requests and evaluating the completeness of discovery produced. Discovery of accounting data can be particularly challenging, as only accounting data for the relevant periods should be requested or produced.
There are numerous accounting software programmes. How do you deal with all these different programmes?
I usually arrange to export relevant accounting data to a format that I can put into forensic accounting software I have developed. This avoids the problem with having to own the software the accounting data is in. Further, most accounting software is not generally adept at finding and analysing transactions as required for forensic analysis. My software includes special tools to transfer relevant data out of QuickBooks.
Jeffrey A. Cone, CPA
Cone Consulting Group, Ltd
15582 S Howards Mill Rd
Mulino, OR 97042
Since the late 1980’s Jeff has provided forensic accounting and database analysis services to legal teams and businesses. He has experience with all phases of the dispute process, including initial investigation of the facts, developing strategy, assisting with both document and electronic discovery, analysing and explaining complex data, and providing deposition and trial testimony as an expert witness. He has developed software tools to assist with data analysis and electronic discovery, including software to extract and analyse QuickBooks accounting data.
For more information please see www.ConeGroup.com.
Cone Consulting Group works with large and small law firms, corporations and government clients nationwide to uncover deeply-buried information for resolving disputes.
When you’re up against time and vast amounts of data, hire the professional who knows how to mine those files and find the evidence necessary to prove your point and resolve the dispute.
More than a CPA and more than a software programmer, Jeff Cone combines both these skills as a forensic accounting expert to empower your legal management team in unique ways. Whatever stage or kind of dispute you are involved with, Cone can help with over 20 years of valuable experience consulting, evaluating, and developing strategies. He has built his reputation on understanding, analyzing and interpreting data that’s produced or received in disputes and can effectively communicate issues and conclusions to everyone involved in a dispute be it attorneys, arbitrators, jurors, judges or business executives.