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Under the direction of various law firms, this investigative and forensic accountant provides expert support in cases involving disputes over financial data. He spoke with us about his practice and his collaboration with the legal community.
Denis Hamel is Partner, Investigative and Forensic Accounting Services, at MNP
Taking nothing for granted. Understanding the realities that lie behind the figures. This is the work of investigative and forensic accountant
Denis Hamel, Partner at MNP. A leading expert in forensic accounting, he spends long hours analyzing and scrutinizing the financial figures that are a frequent source of disputes.
“An auditor’s job is to provide reasonable assurance that a company’s financial statements are reliable,” he explains. “In investigative and forensic accounting, we do not assume this is the case. Transactions are reviewed meticulously under a microscope. This diligence provides a wealth of invaluable information and helps us to target our investigation where we have identified potential risks.”
Denis Hamel works with the assurance that comes from 30 years of experience. A graduate of UQAM, he has honed the art of interpreting data and listening to people. The vast majority of his assignments come from law firms. His work focuses on contentious cases such as contract disputes, shareholder oppression, and employee leaving with a secret formula or various types of fraud.
The information pointing toward a particular aspect of a company’s accounts occasionally comes from whistleblowers, whether former employees, victims or anonymous letter writers. His responsibilities include quantifying damages.
His clients cross the spectrum of industries, from manufacturers and engineering firms to multinational aerospace corporations. “My background in insolvency has been a big help,” says Mr. Hamel, who finds this experience puts him in a better position to grasp and assess information.
Mr. Hamel is co-leader of a seven-member investigation team. Due to the nature of their work, they spend most of their time working closely with a legal team. “We have a good understanding of how the legal system works,” he says. “We are able to coach lawyers on the financial aspects of cases. Sometimes they are very knowledgeable about our side of things; other times they need more support.”
Half of his cases are settled, a desirable outcome in his opinion, which comes about when the parties are able to “set aside their emotions”. “When the entire financial aspect is clearly set out, emotions tend to fade,” he believes. “This ensures that people are taking legal action for the right reasons. And good listening skills are essential. I’ve taken part in mediation sessions that were more like group therapy meetings. The most important thing is not to walk into these encounters in ‘pitbull’ mode.”
He advises lawyers to involve investigative and forensic accountants as early on as possible, before the examination process. The investigation phase may lead to production of a report. “A wise lawyer brings us into the mix from the start,” he states.
According to Mr. Hamel, the Enron scandal was the catalyst for major changes in investigative and forensic accounting. People realized that no one was immune, that in this time of WikiLeaks, the truth always comes to light sooner or later.
That mega-scandal and the many others that followed, including the Norbourg and Mount Real affairs in Quebec, also brought changes to accounting firms. All of a sudden, everyone wanted audits of everything. Demand for accounting services grew to the point where frequent conflicts of interest began to arise. For example, it is difficult to offer litigation support services to a company that is already an audit client of the firm.
As a former employee of Deloitte, “which audited half of Quebec Inc.,” Denis Hamel appreciates the fact that most of MNP’s clients are in the private sector, making any risk of conflict of interest minimal. Meanwhile, inquiries continue to come in. “The bigger and more complicated the investigation, especially at an international level, the more interesting the work,” he notes.
It is on the international stage that a number of Canadian companies have been hit with corruption probes in recent years. In an increasingly global economy, the temptation to play the game has been difficult to resist among certain less scrupulous corporate directors. “Canadian companies abroad are required to follow the anti-corruption guidelines applicable in Canada, which are clear,” Mr. Hamel explains.
Generally speaking, he says, “there’s been no pandemic of honesty! No more here than anywhere else.” He does not find corruption to be any more rampant in Quebec than anywhere else in Canada, except that “here, we’ve been facing the issue head on”. “In Ontario, it’s a fact that 5% of revenue is lost to fraud, and people live with it. Here in Quebec, people have been forced to take a closer look at certain sectors, like construction, and more forensic accountants have received training in this area.”
There may not be more fraud, but the level of vigilance is greater. “I’m not complaining,” Mr. Hamel concludes. “It means more work for us!”
To learn how MNP can help you, contact Denis Hamel, CPA, CA, CA-IFA, CIRP, CFF, CFE, Financial Advisory, VFLS, at 514.861.9724 or
[email protected], or your local MNP Business Advisor.
This article was originally published in French on
Related Topics:Forensics; Litigation Support; Lawyers; Fraud
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