Forensic – Financial Investigations

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FINANCIAL INVESTIGATIONS
AND FRAUD COUNTERACTION PROGRAMS

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KRESTON UKRAINE

Kreston GCG is a Ukrainian division of the global network Kreston International, which is one of the largest accounting and consulting organizations in the world. It takes pride in its team of more than 20,000 dedicated professionals located in 108 countries.

AMOUNT OF FINANCIAL LOSSES

What is the actual size of losses and potential damage resulted from abuse of office?
5%

FROM REVENUE
GLOBALLY, ACCORDING TO ACFE

5-15%

FROM REVENUE

In Ukraine,
according
to Kreston GCG

HOW DO THESE LOSSES OCCUR?

Bribery and corruption

  • Illegal Gratuities
  • Economic Extortion
  • Kickbacks
  • Bribery Practices
  • Bid Rigging

Embezzlement and misappropriation of assets

  • Misappropriation of assets
  • Unconcealed embezzlement
  • Fictitious transactions and artificial price raising
  • Non-essential or redundant expenses
  • Procurement of illiquid assets
  • Ungrounded write-off

Financial statement fraud

  • Illegal revenue recognition
  • Non-disclosure of liabilities and revenues
  • Overstatement of assets value
  • Improper disclosure of statements
  • Timing manipulations with transactions recording
  • Understatement of liabilities and revenues
  • Falsification of contracts and source accounting documents

Information
theft

Sabotage

Negligence

FRAUD IN UKRAINIAN COMPANIES

звіт с.1-2
звіт с.3-4
звіт с.5-6

OUR SOLUTIONS

Kreston GCG offers forensic services covering all risk zones associated with the damages caused by fraudulent activities, abuses of office, neglect of duty and other harmful acts affecting both the business itself, and its relations with the counterparties.

Financial investigations

Retrospective audit of the company operations. Assessment of damages and lost profits, search for the guilty parties and collection of evidence.

  • Analysis of security services practiced in the company. Evaluation of procedures and internal policies.
  • Efficiency audit and assessment of financial losses in the following areas: production, procurement, sales.
  • Fraud investigation in a Group.
  • Detecting the cases of misappropriation of assets, illegal use of assets, overstatement of expenses, understatement of revenues, corruption, conflicts of interests

Development of a fraud counteraction system

Development of a fraud counteraction system. Operation monitoring, implementation of policies and internal oversight procedures.

  • Development of an action plan for fraud counteraction.
  • Organization of a corporate hotline.
  • Production and refinement of an online form for inquiries.
  • Organization of an economic security and internal oversight service.

Search and recovery of assets, support in disputes and litigations

Negative implications from abuse can be decreased via pretrial proceedings, search of the stolen assets in Ukraine and internationally, recoverables obtained through legal authorities. Even the selective punishment of guilty parties is a mandatory condition for controlling fraud in the future.

  • Assessment and valuation of the damage, as well as the revenues and opportunities lost.
  • Collection of disclosed information on the parties to dispute.
  • Evaluation of the dispute and strategy development.
  • Adequate collection of evidence for law enforcement agencies and courts.
  • Forensic accounting expert examination.
  • Search of assets in various jurisdictions.
  • Legal support in Ukraine and abroad. Provision of an expert opinion evidence.

OUR CASES

Here you can see some impacts of our projects in financial investigation and evaluation of economic security risks.

Стратегия

ALCOHOL BEVERAGE HOLDING

The analysis and financial investigation revealed:

  • Damage inflicted by the holding as a result of inefficient management over the account receivable, unreasoned transfer of advance payments to non-credible suppliers in the amount of ₴3.8 million; ;
  • damage inflicted from the inefficient management of stock in the amount of ₴4.9 million. ;
  • – overstatement of costs for capital repairs and construction of various buildings fo ₴1.4 million (costs of work and materials included), which reached 220% in some cases;
  • – violation of security rules through unauthorized access to the warehouse;
  • – risks of fraud due to the insufficient level of automation of cash accounting, insufficient quality of document circulation;
  • – shortcomings in policy on conflicts of interests and discrepancies with segregation of duties, creating ample opportunities for fraudulent activities.
Read more
Стратегия

PUBLIC UTILITY ENTERPRISE

he investigation of financial activity revealed the abuses of office that had caused losses for 3 years in the total amount of ₴250 million, including:

  • – overstatement of prices and volumes of repair and construction works;
  • – cost overstatement of the services procured;
  • – value understatement of the premises leased (up to 10-15 times);
  • – poor control over consumption of POL, water, electricity;
  • – mismanagement of liquidity and debt;
  • – unreasonable sale of equipment and scrap metal.
Read more
Стратегия

AGRICULTURAL GROUP

The financial investigation in the use of loan funds for the last 3 years revealed a number of fraudulent operations performed by executives, which had resulted in the owners’ losses:

  • – The withdrawal of cars, equipment, real estate for the benefit of affiliated persons — more than ₴140 million. – withdrawal of loan funds to benefit the non-residents — more than $80 million;
  • – sale of products to affiliated parties at understated prices, causing losses of more than ₴1 billion;
  • – transfer of corporate rights of subsidiaries for the benefit of affiliated persons in the amount exceeding ₴400 million. - creation of "technical liquidity" to obtain loans in an amount exceeding the holding’s credit solvency;
  • – creation of excessive amounts of collateral grain (with the international surveyor involved), exceeding the actual capacity of the holding's elevators.
Read more
Стратегия

PHARMACEUTICAL ENTERPRISE

The inventory accounting and analysis of security systems revealed:

  • - systemic violations in accounting of the warehouse inventory, falsification in results of the inventory accounting;
  • - poor quality equipment in warehouses, which led to systematic errors in counting and weighing;
  • - manipulations with the inventory written-off for production, overstatement in the quantity of products and materials written off;
  • - inadequate regulation of the employee access system enabling valuable articles to be taken away by car;
  • - Ineffective fire safety system, creating risks of damaging property and lives of employees as a result of fire;
  • - conflicts between production and financial staff, which decreased the overall performance of the enterprise.
Read more
Стратегия

AGRIBUSINESS GROUP

The financial investigation in the use of loan funds for the last 3 years revealed a number of fraudulent operations performed by executives, which had resulted in the owners’ losses:

  • – The withdrawal of cars, equipment, real estate for the benefit of affiliated persons — more than ₴140 million. withdrawal of loan funds to benefit the non-residents — more than $80 million;
  • – sale of products to affiliated parties at understated prices, causing losses of more than ₴1 billion;
  • – transfer of corporate rights of subsidiaries for the benefit of affiliated persons in the amount exceeding ₴400 million. - creation of "technical liquidity" to obtain loans in an amount exceeding the holding’s credit solvency;
  • – шахрайська купівля-продаж підприємств;
  • – creation of excessive amounts of collateral grain (with the international surveyor involved), exceeding the actual capacity of the holding's elevators.
Read more
Артем Ковбель

Artem Kovbel

Partner

Search and recovery of assets
Support in negotiations and litigations
Financial investigations

Артем Ковбель
Святослав Ефремов

Sviatoslav Yefremov

Partner

Financial investigations
Development of a fraud counteraction system
Financial and tax Due Diligence

WHY US

None of our projects has ever ended without detecting significant problems or violations.

7000+ PROJECTS COMPLETED

EXPERIENCE

Being a part of the leading global network Kreston International, we have access to the best auditing and consulting practices.


TEAM

Our team comprises 30 experts from Ukraine and more than 200 from the countries of North America and Western Europe.

EXPERTISE

Our expertise covers investigation of the staff’s fraudulent activities, operation efficiency assessment, corporate intelligence, support in disputes, litigations, development of fraud counteraction systems.

Audit and consulting practice by Kreston GCG

7000+

PROJECTS COMPLETED

200+

REGULAR CUSTOMERS

TOP12

OF THE WORLD RANKING

150+

FULL-TIME STAFF
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