What is a forensic and what are these reports for?

• Courts: BBVA blames the 'Villarejo case' on Francisco González and his team

Forensic doctors are responsible, among other things, for determining the causes and the manner in which an unnatural death occurred, as well as helping judges in the procurement of Justice by clarifying doubts about the circumstances of an alleged criminal act. Eliminating death and violence, this is broadly the task of forensic reports, documents that have gained relevance in recent months as a result of the alleged link between BBVA and Iberdrola with the 'Villarejo case'.

Both the entity chaired by Carlos Torres and the electric company led by Ignacio Sánchez Galán have hired PwC (PricewaterhouseCoopers) to prepare the exhaustive internal analysis that allows them to find out how far the alleged relationship of both companies with the Cenyt company, linked to the former commissioner, reached. of cop. But beyond these cases, why now everyone talks about forensic ?

What are these reports?

Forensics arise from the internal initiative of a company or someone linked to it, as directors, shareholders or partners, following a suspicion or indication of an irregularity that requires the reconstruction of what has happened to debug responsibilities and make decisions or If necessary, initiate legal proceedings.

"In general, this type of action arises when the company has some indication that there has been some illegal or unethical conduct, such as a case of fraud, misappropriation, accounting manipulation ...", explains Manuel Mendiola , Head of the Technology Risk Area at PKF Attest.

The forensic should not be confused with an internal audit , since the second is limited to the financial situation of the company and is governed by the criteria of the accounting regulations, while the first is a more in-depth work in which the treated matter

Why does it start?

In the development of the activity of a firm, situations of conflict or irregularities may arise that jeopardize its continuity or reputation, sometimes with irreversible effects. In those cases, the company considers scrutinizing the origin of the situations and requires the services of an independent third party to carry out this work.

What aspects do these reports investigate?

According to sources in the sector consulted, basically three: the misappropriation of assets by someone from the company, corruption between individuals or with public officials and the manipulation of financial statements, where an audit is usually not enough.

What techniques and procedures are used?

Depending on whether one issue or another, the procedures vary, although there are basically four: interviews with the perimeter of people who allegedly have information or have been involved in the irregularity; corporate intelligence analysis; copying and analysis of computer equipment (this includes personal computers, mobiles, tablets , etc.) and a substantive review of accounting type.

What elements should they include?

Manuel Gardeazabal, partner of Audit and Economic Consulting at PKF Attest, would highlight "the detailed description of the methodology used - referring to the methods followed and the premises that have served as the basis for the conclusions - that the report contains a clear conclusion and well argued about the purpose of the assignment and that it be properly accredited with all the necessary supporting documentation. "

Is it necessary for me to mediate a judicial proceeding?

No. Sometimes that is the trigger for the intervention, as in BBVA and Iberdrola, but this is not always the case. "Although in a very high percentage of cases, these works end up being provided as evidence in legal proceedings to prove a specific illegal or criminal act," says Alfonso Santamaria, partner of Audit and Economic Consulting at PKF Attest, a firm specialized in the sector.

What kind of companies turn to them?

There is no single profile, "fraud can affect any type of company," say the sources consulted. They agree, of course, that it is a matter of size rather than of sectors and that, the larger the firm, the more susceptible they are to suffer irregularities. Beyond that, among the companies that request a forensic investigation are listed and unlisted, family and non-family, large and less large ...

"We have found that it is more common in larger companies that have experienced high growth in a relatively short period of time and have not implemented effective internal control procedures in order to minimize these fraud risks. However, they are also numerous the forensic work we do for SMEs, "says Alfonso Santamaria.

Are they more common now than before?

Although investigations of this type are not new in auditing and consulting, in the sector they do point out that there is now a greater sensitivity within companies and in society to clarify possible irregularities, unlike before, when they preferred to remain hidden.

"In our firm, of course, it is necessary to read the newspapers to realize that this type of action is increasingly demanded," says Manuel Gardeazabal.

Who makes these reports?

KPMG, Deloitte, EY and PwC - the so-called Big Four - are the four major consultants that companies most frequently use for these tasks, but there are also a good number of law firms and boutiques specialized in resolving conflicts that they make up the universe of forensic investigation, economically speaking.

According to the criteria of The Trust Project

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