We were engaged by investigative counsel on behalf of a select committee of the board of directors for one of the world’s largest financial services companies. Our work was part of an independent investigation on financial reporting and other accounting matters. The scope of the investigation included an analysis of the earnings impact of the company’s application of generally accepted accounting principles and certain other critical accounting decisions and adjustments in connection with allegations of earnings management and manipulation of incentive compensation.
Our forensic accounting and data modeling techniques uncovered evidence of accounting fraud in connection with achieving financial targets for maximizing incentive compensation for the corporate officers and senior management. Our forensic accounting and IT systems analysis included reviewing and modeling pools of mortgages and mortgage-backed securities as well as gaining a detailed understanding of the process and systems used to compute the accounting entries for these assets. We worked jointly with outside counsel to conduct more than 50 interviews of company personnel including officers and senior management. We participated in regular status briefings administered by the agencies and regulators monitoring our investigation, including the Department of Justice, the Securities and Exchange Commission, the Office of Federal Housing Enterprise Oversight, and the Public Company Accounting Oversight Board.