Forensic Audit and Investigation Overview
Conducting a Forensic Audit or Forensic Accounting refers to an investigation into the financial affairs of an entity, often associated with investigations into an alleged fraudulent or non-fraudulent situation (monetary disputes in relation to a business closure).
During a forensic audit or investigation, the focus is on examining financial records, identifying anomalies or irregularities, and tracing the source of any suspicious activity. This often involves reviewing bank statements, invoices, tax returns, and other financial documents to identify patterns or inconsistencies.
In addition to financial analysis, we will also conduct interviews with employees, review emails and other communications, and investigate the use of company assets, such as vehicles and equipment.
Overall, our goal is to help companies identify and mitigate the risks associated with potential fraud or other forms of financial crime. By providing expert insights and actionable recommendations, we can help businesses take proactive steps to protect themselves and their assets.
The process of conducting forensic accounting is called an investigation and refers to the practical steps taken by the forensic accountant to gather relevant evidence of an alleged fraudulent activity. Actual steps will involve:
- discovering if a fraud has taken place and the type/nature of the fraud
- identifying those involved
- quantifying the monetary amount of the fraud (financial loss suffered)
- presenting evidence to prevent a reoccurrence of the fraud
- presenting findings to the client and potentially to court.
Financial Planning Overview
Our financial planning is offered in two ways – Tax Planning and Financial Modeling.
Tax Planning
We structure businesses’ financial affairs to ensure that the taxes and allowances are up to date. Our primary focus is on the following taxes:
1. Company Income Tax
-
- CIT is governed by Companies Income Tax Act (CITA), Cap C21, LFN 2004 (as amended)
- CIT is a tax imposed on profit of a company from all sources
- The rate of tax is 30% of total profit of a company
- Some profits are exempted from CIT provided they are not derived from trade or business activities carried out by the company e.g. Cooperative society
- Every company shall pay provisional tax not later than three (3) months from the beginning of each year of assessment which is an amount equal to the tax paid in the previous year of assessment. This is a payment on account of the year’s income tax assessment
The due date for filing returns:
-
- For newly incorporated companies, within eighteen (18) months from the date of incorporation or not later than six (6) months after the end of its accounting period, whichever is earlier
- For existing companies, within six (6) months from the end of the accounting year.
- A self- assessment filer may (by application) commence payment of instalment before due date but such instalment cannot extend beyond two months after the due date
- Companies in operation for more than four (4) years are liable to minimum tax except those specifically exempted by the tax law
Minimum Tax under CITA arises where:
-
- A company makes a loss
- A company has no tax payable
- Tax payable is less than minimum tax
2. Capital Gains Tax (CGT)
-
- It is governed by Capital Gains Tax Act, Cap C1 LFN 2004 (as amended)
- Capital Gains Tax is charged at a flat rate of 10% of chargeable gains
- All chargeable assets are subject to Capital Gains Tax when disposed at a gain, except those specifically exempted by the Act
- Chargeable assets include all forms of property whether or not situated in Nigeria
- The due date for filing return and payment of the tax is the same as in Companies Income Tax
- Allowable expenditure for the purpose of CGT includes fees, commissions or remunerations paid for professional services and cost of transfer
- Gains exempted from CGT include those arising from disposal of decorations awarded for valour and gallant conduct, life insurance policy, Nigerian government securities, stock and shares etc.
- Gains shall not be chargeable if it accrues to some organizations provided the gain is not derived from any disposal of any asset acquired in connection with any trade carried on by the organization, e.g. An ecclesiastical, charitable or educational institution of a public character, Statutory registered friendly society, Cooperative society registered under Cooperative Societies Law of any State, Trade union registered under the Trade Unions Act.
3. Withholding Tax (WHT)
-
- Withholding Tax (WHT) is a method used to collect Income Tax in advance
- WHT is deducted at varying rates ranging from 5% to 10% depending on the transaction
- The due date for filing WHT returns is 21st day of every succeeding month
- Penalty for late filing of returns is N25, 000 for the first month it occurs and N5, 000 for each subsequent month the failure continues
Financial Modeling
Our financial modeling service offers comprehensive financial analysis and forecasting for businesses of all sizes. Our experienced financial analysts work closely with our clients to understand their unique business needs and create custom financial models that accurately reflect their current and future financial positions.
Using state-of-the-art software, our financial models incorporate a wide range of financial drivers, including revenue growth, operating costs, capital expenditures, and more. This allows us to provide our clients with a complete picture of their financial health and identify areas for potential improvement.
We use data analysis to predict business performance, manage assets and track cash flows. Financial modeling is a vital tool, essential for a business to succeed, whether you are a startup or a Fortune 500 company. Our role is to help partner organizations achieve the under listed objectives by combining accounting, finance, and business metrics to create a forecast of their future results.
- Ensure the adequacy of funds for the business
- Create a reasonable balance between outflow and inflow of funds so that stability is maintained
- Reduce uncertainties around changing market/industry trends
- Plan for long term growth and expansion of the business
In addition to our financial modeling services, we also offer ongoing financial analysis and forecasting support to help our clients stay ahead of changing market conditions and make informed business decisions. With our help, businesses can confidently plan for the future, secure funding, and achieve their financial goals.
