Using the Internet for Litigation Research

We use Google and the internet  as a valuable research tool in almost all our forensic accounting litigation matters. The information available enables us to check the stories of both the plaintiff and defendant against other sources of information.

Financial Statements tell a story

As forensic accountants, one of the first places we examine is the financial statements and income tax returns. To us they tell a story. The financial statements are a record of all the transactions of the business. We examine the trends and ratios of a business -

• Are they consistent with a business of this type?
• Are they consistent with the alleged activities and events of the parties?
• Is there cash not being declared?
• How is the business financed?
• Is the growth or decline of the business consistent with other ratios and transactions in the business?

Use of the Internet as a Research Tool.

Once we have examined the alleged facts and the financial statements, we look to the internet to provide us with further confirmation of the facts and financial statements. The following is available on the internet:

Google

A simple google search of the individuals and the companies involved. We have found the following from a simple searches that only take a few minutes:

• A documentary produced post-accident by an injured plaintiff who said that he was no longer working.
• Company websites showing new products developed.
• Company prospectuses and other published data

Google Maps

A very useful service for that shows the location and street-view of properties. We use it regularly for double checking the likely value of properties, the use of those properties, what the business looks like, size of operations etc. We have found that a builder who claimed a significant loss of income was in fact building and developing townhouses which had no yet sold. We were able to show the property being developed (streetview photos) and combined these with council minutes as to the development applications.

Company and Individual ASIC  Searches

In any litigation matter, where we suspect (gut instinct) that there may be more than one company, we do an individual ASIC search for directorships and shareholdings. We then get company searches for each company that the individual has an interest. This provides a wealth of information as to company structures, related shareholders etc. The use of unit and discretionary trusts can also be uncovered by this method.

We have found by this method:

• In one case, 17 other companies that we previously not disclosed. The allegedly lost income was being diverted to these companies.
• Property development joint ventures that were previously not disclosed.
• Hidden assets and trusts.

It is important in any litigation, to ensure that all the entities have been examined and their nature and relationship to other entities within the group is explained. For the defendant, it can expose serious flaws in the plaintiff's claim. In plaintiff cases, it can expose whether the plaintiff's advice can be relied upon.

Other Internet Tools

Alexa.com provides information on the global search volumes. By entering the url of a website, you can determine the popularity of a website. Although inaccurate for small companies, it will tell you whether the site gets any visitors at all and that data can be combined with other information to get an overview of the business.

In conclusion, we use a combination of tools, analysis of financial information and our own experience to determine whether our own view of the value and damages associated with any litigation matter. Our view may, at times, be at odds with the version of events provided by the defendant or the plaintiff, but we consider that that is part of our role as forensic accountants.