Merger and Acquisition Fever

Less than 60 days after Company A made a commitment to purchase Company B, Company B reported lower-than-expected, first-quarter earnings. After closer scrutiny it was discovered that a substantial portion of Company B s historical revenue had been generated by selling off existing investments to accelerate income recognition “a practice called securitization" rather than recognizing income over time as the financial investments matured. Earnings dropped precipitously once Company B adopted Company A s funding policies, which didn't include much securitization.

By applying their forensic accounting, analytical, and legal skills, fraud examiners can help clients identify potential issues before they commit to purchase a company, preventing unfortunate surprises after the deal has closed.