Lost Profits for an Unprofitable Business

by Chad Thompson

So you think you know the "rules" with losses for unprofitable businesses? Think again!

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There's More to Inventory Losses than Invoices!

by Chad Thompson

Don't be fooled into thinking inventory losses are easy, and once you have invoices you are on your way! The truth is a compellingly different story.

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Preventing Employee Theft is Simple

by Nadine Swain

As a forensic accountant having analyzed hundreds of employee fraud matters, I have found among them a shared theme: all could have easily been prevented.

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Our New Division: Assurance Business Valuators

by Nadine Swain

We've recently launched a new division: Assurance Business Valuators, which is dedicated to business valuation services.

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One Step at a Time: A practical approach to understanding an income statement

by Chad Thompson

Attorneys involved in lost profits litigation have likely seen more than a few income statements, or “profit and loss” statements. A solid understanding of the income statement is helpful in identifying the strengths and weaknesses of a case, assessing an expert report, or preparing a successful cross-examination. This article sets forth a practical approach for reading, understanding and analyzing an income statement.

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Do You Have a Lost Profits Case? Remember the Balance Sheet

by Chad Thompson

In lost profits or other economic damage matters, the income statement receives high scrutiny; as it should. However, forensic accountants and other practitioners sometimes overlook the balance sheet. Depending on the circumstances of the case, this ommission could unravel the entire analysis.

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Lost Profit Claims in a Recessionary Environment

by Chad Thompson

Lost profit cases always present complex issues, which is why they are best addressed under the careful eyes of a trained forensic accountant. The inherent complexities are exacerbated in the face of an economic recession. This article helps you navigate the potential landmines. 

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Top 5 Mistakes with Business Income Claims

by Chad Thompson

Keeping with my theme of fives (see The Accounting Fives), I've decided to write about the top 5 mistakes in business income loss claims. Insurance companies view certain business income loss claims as straightforward. As such, they tend to handle these claims internally. While certainly not intentional, mistakes sometimes arise. 

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The Accounting Fives

by Chad Thompson

A few months ago, I posted an article titled "Internal Controls and the Five Senses." More recently, I discussed the five methods used to project sales when performing an income loss evaluation. Two fives. A coincidence? Maybe not; as it turns out, five is quite popular in accounting. This is a strange observation since five is an odd number and accounting is all about symmetry and balance.

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Fraud and the Small Business

by Chad Thompson

Each year, we analyze a significant number of employee fraud cases involving small businesses. I've observed that employee frauds most frequently occur with moderately successful small businesses. In this context, the profile of a moderately successful business is one in which the owners enjoy an above-average living, but at the same time are not so successful to bring the need for a structured environment with layers of management.

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Uses and Limitations of Industry Ratios

by Chad Thompson

Industry ratios are often used in forensic accounting engagements such as business income loss evaluations or business valuations. When used correctly, they effectively buttress the accountant's conclusions. But on the flip side, using these ratios inappropriately will compromise an entire engagement. To provide insight into how to use these ratios, I've compiled the top three uses and misuses of industry ratios.

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Burned Out-of-Sight Inventory May Hold Clues to Financial Motive

by Chad Thompson

Sometimes, there are various financial incentives for a business owner or manager to commit arson at the business facility. Financial motive to commit arson can include the desire to liquidate excess or obsolete inventory, the desire to escape debt, or the desire to promptly stop an unprofitable venture. In the case of arson-for-profit, inventory is often times an integral piece of the financial motive puzzle.

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Accounting is Life!

by Chad Thompson

I was drawn to the accounting profession when I heard the phrase "accounting is the language of business." I'm not sure who coined that phrase, but I'm taking credit for this one - "Accounting is Life."

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Internal Controls and the Five Senses

by Chad Thompson

While many small businesses are plagued by deficient internal controls, protecting the business from fraud does not have to be an expensive endeavor. To a degree, sufficient internal controls are as simple as the five senses: sight, hearing, touch, taste and smell.

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80's Movie Reveals Tips for Testifying

by Chad Thompson

I've discovered some wisdom within the 1989 film, Roadhouse. In this film, Patrick Swayze's character James Dalton accepts the job of cleaning up a bar gone bad. After surveying the scope of the assignment, he summons his coworkers for a meeting to discuss the plan.

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Business Income Loss Documentation

by Chad Thompson

When faced with a business income loss claim, the most frequently asked question is “which documents are required?” 

 

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Business Income Loss for Unprofitable Businesses

by Chad Thompson

When an insured was unprofitable prior to a loss and is expected to continue operating unprofitably during the loss period, it can be easy to make mistakes when interpreting or applying business income loss coverage.

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