FRA is pleased to contribute to Global Investigations Review’s (GIR) first edition of The Guide to Monitorships with a chapter on “Leveraging Forensic Accountants”. As the monitorship model continues to grow in scope in the US and beyond, the strategic benefit of engaging a forensic firm with multi-jurisdictional expertise in data analytics, data governance and compliance monitoring activities, should not be underestimated.
FRA Founding Partner Frances McLeod, Partners Emma Hodges and Neil Goradia and Director Jenna Voss offer comprehensive insight into the advantages of engaging an experienced forensic firm to support companies under monitorship or the monitorship team. As the monitorship model continues to grow in scope in the US and beyond, the strategic benefit of engaging a forensic firm with multi-jurisdictional expertise in data analytics, data governance and compliance monitoring activities, should not be underestimated.
There is no one-size-fits-all approach to monitorships, as the situation will vary depending on industry, the nature of the monitorship and the maturity of the company’s existing compliance programme. That said, the involvement of a forensic firm in a monitorship is most successful when triggered from the start of the monitorship life cycle (i.e. selection) so that the most efficient work plan can be created from the initial stages.
A forensic firm can play one of three roles: the monitor, the supporting firm to the company or the supporting firm to the monitor. Our chapter focuses on the two supporting roles.
The ‘Company-Support’ Forensic Firm. Employing a monitor-response team is one way for a company to alleviate the significant and often unprecedented burden that a monitorship can place on a company’s time and resources. A forensic firm can help the company proactively understand and respond to key issues, including:
- helping the company navigate the nuances of monitorships and certification decisions by better understanding the monitor’s role and anticipating their demands;
- providing project management support to the company, such as facilitating its responses to monitor requests for data and documentation, preparing status reports, and coordinating meetings and interviews with the monitor;
- providing additional resources to fill new or vacant roles within the company, or to departments that require additional support such as boosting internal audit and investigations teams;
- supporting the company in developing and executing plans to implement the remedial measures the monitor recommends, including in remote locations;
- identifying potential areas of concern through compliance testing and monitoring, allowing the company the opportunity to pre-empt these issues during the monitorship; and
- supporting the company’s implementation of measures to mitigate identified risks, whether concerning policies and procedures, controls, technology, data management, or data analytics.
The ‘Monitor-Support’ Forensic Firm. Monitors must carefully consider how to structure a team with sufficient subject matter expertise, industry knowledge, technical and analytical skills, and resources to meet the monitorship objectives established by the regulators. Forensic firms can be explicitly required or a matter of best practice in a monitorship team, particularly given the heavy emphasis on data analytics by compliance regulators. An experienced forensic firm can offer the following complementary skill sets to the monitorship team:
- understanding the historical misconduct and subsequent investigation, focused principally on the scope and methodology employed by the company;
- understanding the company’s current situation, including what, if any, remediation efforts are already in place;
- structuring the monitor’s assessment and determining what a company must do to meet the regulator’s mandate;
- devising clear and pragmatic recommendations;
- testing the company’s remediation efforts following implementation of the monitor’s recommendations; and
- reporting to the monitor, the company and relevant regulators.
The chapter also offers practical advice on selecting the right forensic firm for the monitorship, weighing in factors such as industry and subject matter expertise, the firm’s independence, experience and credibility with regulators, systems and data management expertise, staffing and project approach. Additionally, in cross-border and multi-jurisdictional engagements, the forensic firm should have the capability and knowledge to create bespoke solutions to navigate data privacy and management hurdles.
Accreditation: An extract from the first edition of The Guide to Monitorships. The whole publication is available at https://globalinvestigationsreview.com/edition/1001321/the-guide-to-monitorships-first-edition