Assurance Services

An increasingly litigious environment and wider activity of the various regulatory and governing bodies mean that disputes are becoming ever more frequent.

We provide accounting expertise to quantify the losses incurred or likely to be incurred as a result of arguments with customers, suppliers or other stakeholders and we provide support during negotiations and as expert witnesses in court should a settlement not be reached.

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Our services

• Bilateral investment treaty disputes 195K, January 2009
• Quantification of economic loss
• Contractual arrangements
• International arbitrations
• Product recall disputes 409K, May 2009
• Insurance claims
• Professional negligence
• Intellectual asset disputes
• Shareholder disputes
• Compensation claims in respect of compulsory purchase orders
• Business interruption 210K, January 2009
• Disputes & Differences
• Competition and trade services 215K, July 2008
• Recovering the cost of third party damage to your infrastructure 328K, March 2009

If you have any queries about Dispute Services, please contact Philip Haberman or Sara Fowler.

Fraud Investigations. Disputes. Regulatory reviews. Regulatory compliance monitoring. Fraud risk management. Transaction monitoring.

In these and other contexts, businesses need to access unstructured data (such as emails, word documents and spreadsheets) and structured data (such as SAP or other accounting databases, HR, procurement or other databases) for relevant content.

It can be like trying to find a needle in a haystack. Let us help to remove some of the hay.

It is how Ernst & Young makes a difference.

Learn more:

• eDisclosure services
• Forensic data analysis
• IT forensics

If you have any queries about Forensic Technology & Discovery Services, please contact Sanjay Bhandari or Paul Walker.

Mitigating against the risks associated with fraud and other misconduct is not a new phenomenon. Coupled with continual advances in technology and the broadening activity of regulators at home and overseas, the financial and reputational consequences of not doing enough to tackle these problems are escalating.

Experienced in forensic accounting, law, financial and securities regulation, technology systems, and risk management, our multidisciplinary teams investigate situations where you suspect you have a problem. We also help you take preventative measures and minimise the risk of such problems occurring in the first place.

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Our services

• Overview
• Forensic Insolvency Solutions
• Financial reporting and securities fraud investigations
• Regulatory investigations (eg FCPA)
• Fraud prevention (including fraud risk reviews)
• Forensic due diligence 6.6Mb, September 2009
• Fighting financial crime
• Insolvency and bankruptcy fraud investigations
• Sales and marketing reviews
• Intellectual property risk services
• Asset tracing and recovery
• Shrinkage evaluation and advice
• e-Crime 179K, April 2008
• Fraud monitoring systems 214K, July 2008

If you have any queries about Fraud & Investigations, please contact John Smart or Jonathan Middup.

Transactions to acquire or sell businesses represent a balance of risk and reward for the parties. Whilst most deals are completed successfully, some inevitably lead to disputes between the parties.

We provide advice throughout the transaction process, from a review of the draft sale and purchase agreement to the resolution of disputes over the purchase price. In so doing we help you reduce risk and provide greater certainty that the post-completion outcome of a transaction is in line with your commercial expectations.

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Our services

Sale and Purchase Agreement (SPA) reviews

Most transaction disputes arise because the Sale and Purchase Agreement ('SPA') has been poorly drafted, and this is exploited by one of the parties to the deal. If the price is dependent on the net asset or working capital position at completion or there is an earn-out clause, then, appropriate and often detailed accounting rules will need to be included in the SPA. The same applies for locked box arrangements. Through our review of the draft SPA, we identify the risks in the financial and accounting clauses and suggest ways to reduce risk or achieve objectives. We also review the accounting warranties to ensure that they are appropriate for you, whether you are the seller or the buyer.

Forensic and anti-bribery and corruption due diligence

Inappropriate or illegal business practices by a target company can, in a share purchase, expose the buyer to reduced revenues, increased costs, reputational damage and regulatory sanctions, even criminal prosecution. Through an assessment of the risk of the target being engaged in bribery and corruption, we can help mitigate the risk of potential future loss of value and adverse public comment.

Completion account reviews

Even if you have no intention of creating a dispute, you can never be certain that the other side will not seek one. Careful preparation or review of the draft completion accounts is therefore essential.

We seek to exploit the SPA to your advantage by helping you prepare or review the draft completion accounts and advising you on compliance with the rules set out in the SPA, so as to maximise value from the process. We can assist you in preparing or rebutting a dispute notice.

Increasingly, we are also asked to advise on the strengths and weaknesses of our client's case and whether they should settle a potential dispute or go to expert determination.

Expert determination submissions to an expert

We can develop arguments and gather evidence to support your position, and advise on how best to present your case to an independent expert. We can also prepare written submissions on your behalf as well as answers to any questions raised by the independent expert.

We can recommend who to appoint as the independent expert and advise on their terms of reference.

Acting as an independent expert /reporting accountant

Most SPAs require that when the parties are unable to resolve matters in dispute arising from completion accounts, the dispute is referred to an independent expert accountant or reporting accountant for determination. There is a misconception that expert determination is a legal process to be driven by the lawyers. Expert determinations aim to resolve disputes over accounting issues and while legal input is often valuable, they should be determined based on accounting expertise and experience in the process of managing a determination efficiently for both parties.

We have extensive experience of acting as the independent expert or reporting accountant which allows you to be confident we will manage the process properly and professionally. Subject to each party being satisfied that there are no conflicts precluding us from being independent, we can act as expert. Our engagement is jointly with both parties.

Breach of warranty claim advice

We assist our clients by gaining an understanding of the issues giving rise to a potential claim and assessing the likely level of damages. Where a claim relates to the accuracy of financial information, for example statutory or management accounts, we advise whether there has been a breach in the first place.

We also advise on the potential risks and rewards, as well as the procedures and mechanics of making a claim. We can support you through the process, acting (if appropriate) as expert witness. Finally we can help extract the lessons learned for future transactions that you may be involved in.

Other post-acquisition investigations and disputes

The change of control resulting from an acquisition can trigger a business dispute or lead to the discovery of fraud and other accounting irregularities. Should this happen, you need to address such problems quickly, efficiently and with minimal impact on your business. We can assist you to investigate alleged misconduct, fraud and non-compliance with regulation.

We can also quantify the potential damages in a dispute, support you in settlement negotiations or act as expert witness in formal proceedings.

If you have any queries about Transaction FIDS, please contact  Maggie Stilwell.