Call Us: (856)222-4723

Blog

Why Accuracy is Key in Lost Profit Calculations

Posted on January 10th, 2018

Understanding the exact amount and value of lost profits is essential in calculating damages during litigation for patent and intellectual property disputes. The assistance of a good accountant is essential to these calculations, as they are able to accurately assess the damages to which a plaintiff may be entitled.

The team at Abo Cipolla Financial Forensics, LLC share their expertise in financial and cost analysis to help clients establish claims for unjust enrichment in patent and intellectual property suits as well as shareholder disputes. We have created this guide to explain why accuracy is so important in these calculations and the methods we employ when making them.

Understanding a Lost Profit Calculation

An accurate lost profit calculation is necessary in order to establish the damages that a plaintiff in patent or intellectual property litigation is entitled to. This calculation involves a number of steps, beginning with the collection and analysis of benchmark data against which the profits of the period of loss can be measured.

With an understanding of regular operations, an accountant can create comparisons to the disputed period’s finances, determining the type, cause, and extent of any damages to regular revenue. This will not only provide the base for an unjust enrichment calculation but the costs associated with the interruption of regular business proceedings.

Uses for Lost Profit Calculations

As previously mentioned, a lost profit calculation can be used for litigation between businesses. However, accuracy is also essential to the resolution of shareholder disputes. An accurate calculation provides information that can either confirm or debunk the existence of fraudulent activity on the shareholder’s or corporation’s part. In order to ensure that these claims have a factual basis, an accurate calculation is essential.

These calculations also provide the basis for understanding how a shareholder or corporation may have been defrauded. If a particular share was overvalued at the time of sale, or if a partner has been left out of the decision-making process, an accurate calculation can aid in the assessment of potential damages or the expedient resolution of a dispute.

Receive Your Lost Profit Calculation from an Experienced Source

With our experience in calculating the loss of profits, Abo Cipolla Financial Forensics, LLC is prepared to help you prevent fraudulent activity in your business. Contact our Mount Laurel forensic accountants today to schedule your consultation, and to begin working towards the prevention and correction of potential fraud.


The Role of a Forensic Accountant in Shareholder Disputes

Posted on January 3rd, 2018

When they occur, disagreements between shareholders create significant complications in a company’s continued operation. Examples of these include shares that have been sold contrary to established agreements and suspected fraudulent activity, both of which can lead to expensive litigation or the halt of further trading.

At Abo Cipolla Financial Forensics, LLC, we provide our clients throughout the Northeast with the information necessary to ethically and efficiently resolve shareholder disputes. We have created this guide to explain some situations where these conflicts may occur and how a forensic accountant can help.

How Shareholder Disputes Can Arise

Whether rooted in fraud or simply through perceived misconduct, there are several circumstances that cause contention between a business’ interested parties. Business relationships can become strained due to disagreements about the direction of the company or the feeling among minority shareholders that their input is being disregarded. In other cases, a shareholder might conduct a transaction that breaches prior agreements without informing the rest of the organization. These unauthorized exchanges can potentially expose the enterprise at large to increased liability as the timing and those involved typically represent conflicts of interest.

Of the many kinds of disputes that can arise, those pertaining to the fiduciary responsibilities that corporations and shareholders hold are often the most litigated. A forensic accountant’s ability to gather and interpret the pertinent details can allow these to be settled before litigation or at least expedite the resolution process.

How Forensic Accounting Helps

Forensic accountants focus on collecting, analyzing, and consolidating financial information that is useful as evidence in a court case or for non-litigation purposes, such as determining the value of a business. The evaluation conducted by these specialized firms can involve anything from a review of financial statements or tangible and liquid asset audits to the interpretation of income reporting and a profit and loss analysis.

When litigation is necessary to reach an agreement, accountants trained in forensic auditing work with lawyers, arbitrators, and other professionals involved in dispute resolution, providing the data to validate or disprove claims. This cooperation may require gathering and compilation of financial information or acting as a professional witness.

Contact Our Mount Laurel Forensic Accountants Today

If you are experiencing a shareholder dispute and require detailed gathering of financial information, contact Abo Cipolla Financial Forensics, LLC today. We are committed to providing a thorough examination of records in order to create equitable solutions.


Protecting your Business from Fraud

Posted on October 10th, 2017

Protecting your Business from Fraud

As a business owner, understanding how to protect your enterprise against fraud is important. Any activity that has a significant impact on the credibility and integrity of your corporate operations also has a negative effect on your company’s financial standing. At Abo Cipolla Financial Forensics, LLC (ACFF), we specialize in forensic accounting, backed by our firm’s extensive background in taxation and corporate accounting.

Our work as forensic accountants is necessary when issues with criminal implications occur, such as employee theft, falsification of financial information, identity theft, securities fraud, and insurance fraud. Not only do all of these situations sabotage your company’s growth, there are often serious legal implications that result from handling these improperly. During our initial consultations with our clients, we review the types of fraudulent activity we most commonly investigate and how the data we uncover can be used in your case to reach a fair, equitable resolution.

If you are looking for ways to proactively protect your company’s interests, below are some areas to consider:

Thorough Documentation

According to the Association of Certified Fraud Examiners (ACFE), 20.6% of cases of fraud are reported by employees directly to their supervisors and 18% is directed to the company’s executives. To encourage your staff to participate in fraud prevention, it’s important to have a system in place that allows them to report suspicious activity anonymously. This can be done by establishing a hotline number, dedicated email address, and/or an online form.

If you haven’t already, we recommend directing your accounting department to thoroughly document all transactions. Sales receipts, invoices, checks, and bank deposits can all be used to give you a clear indication of how cash and other liquid assets flow into and out of your business. You should keep these well-recorded to more easily identify any discrepancies that exist between your accounts and actual cash on hand.

Checks and Balances

Having multiple bookkeepers oversee the management of your company’s finances can be a valuable internal control to implement. A proper system of accountability across a number of dedicated staff members discourages embezzlement and ensures that there are many opportunities to identify any potential fraud. If you cannot support multiple in-house professionals or feel you would benefit from an outside look, outsourced assistance from a forensic accounting firm may allow your financials to be looked at with a fresh set of eyes, specially trained to detect fraud.

If you suspect an employee of fraudulent activity, it’s important to preserve as much proof as possible. For instance, keeping the computer of said employee running will maintain any digital fingerprints they have left behind, whether in the cloud or on the shared company network drive. Such may assist with technology savvy counsel to use this as evidence in trial.

Seeking Out the Services of ACFF

At Abo Cipolla Financial Forensics, LLC, we’ve been invited to investigate cases of fraud, embezzlement, and financial misappropriation. While smaller companies may be able to catch these easily with a straightforward system of checks and balances, larger organizations often require a more detailed approach. Seeking out the services of a forensic accounting company can help you detect financial misconduct where it is present and prevent future instances from occurring.

 

For more information about forensic accounting services and fraud investigation, contact Abo Cipolla Financial Forensics, LLC, today.