Investigated allegations of financial statement fraud of industrial demolition company

Investigated allegations of financial statement fraud of industrial demolition company

Retained by the audit committee of a large privately held industrial demolition company to investigate allegations of financial statement fraud. We analyzed the timing of revenue and cost recognition as well the realization of progress billings taking into account gross profit estimates, change orders, project delays, and litigation activity for long-term construction contracts accounted for under the percentage of completion method of accounting. We also investigated allegations related to hours “stuffing” on individual projects; “ghosting time” whereby individuals charge time to multiple projects simultaneously while only physically present at one project; and, the improper treatment/recording of scrap material between unrelated projects.