Jeffrey Davidson from Honeycomb: Expert Insight into Forensic Accounting
Next up, we hear from Jeffrey Davidson, the Managing Director of Honeycomb Forensic Accounting, who has over 20 years’ experience in working on complex business disputes, with particular focus on the accounting, financial, economic and commercial components. Jeffrey specialises in forensic investigations, litigation support, contentious valuations and dispute resolution, covering civil, criminal and regulatory cases, […]
Next up, we hear from Jeffrey Davidson, the Managing Director of Honeycomb Forensic Accounting, who has over 20 years’ experience in working on complex business disputes, with particular focus on the accounting, financial, economic and commercial components. Jeffrey specialises in forensic investigations, litigation support, contentious valuations and dispute resolution, covering civil, criminal and regulatory cases, and here he tells us about trends in the forensic accounting sector.
In your opinion, what types of skills, both accounting and non-accounting, are needed to be a successful thought leader in the forensic accounting sector?
Thought leadership in forensic accounting is all about responsiveness to client needs. It is about being able to quickly and effectively identify the structural and technical requirements needed to find a solution for the client. Once that solution is found, it must be delivered and presented swiftly and purposefully. It is about attention to detail, without losing sight of the bigger picture within which the role sits, and what the added value of the project is.
How does modern technology present a challenge to uncovering vital information relating to an investigation? How do you overcome this challenge?
Modern technology is a challenge, but it also represents an opportunity and an enabling tool. The purpose of technology is to complement and enhance human intellectual skills and judgement. It comes into its own in giving access to information, particularly in terms of capturing electronic data, and then in enabling very large amounts of data to be reviewed, sifted, searched and analysed. Big data technology tools allow specific references, anomalies and oddities in large data sets, whether verbal, numerical, or even pictorial, to be identified in a fraction of the time and at a fraction of the cost of using humans. This then allows the humans to concentrate on a small data set, most likely to produce results, and which justify the application of human thinking.
How can companies mitigate the risk for economic crime and fraud?
The keys to this are the triple factors of unpredictability, curiosity, and constant review. Fraud and economic crime flourish in an environment of complacency and repetition, where it becomes easy for fraudsters to work around the patterns of control and review. Systems of control are only effective when the fraudster cannot predict what part of the system and which procedures an auditor or forensic investigator will next review, or when and how system changes will be made. The success and longevity of nearly every fraud we have investigated has at least been contributed to by the lack of critical review by those entrusted with the task of keeping a business safe from both internal and external threat. The advice we give the client as part of providing ongoing protection always involves suggestions how to keep ahead of potential fraudsters (and hopefully encourage them not to start!) with ongoing unpredictable review patterns.
What are the most common hurdles that Honeycomb is faced with when assisting with forensic accounting disputes and investigations?
Honeycomb is a very experienced and well-resourced forensics provider, but like any other business, it has to manage resources and make sure it has a well-conducted approach to meeting clients’ needs. Forensics is also a fast moving environment, not only in technological terms. We need to ensure we have the latest technical and electronic tools at hand to complement our human resources, which also require constant training in technical and other areas. Managing the forensic part of the dispute resolution process can also prove a challenge, managing the differing demands of clients and their legal teams, while at the same time engaging productively with opposite numbers.
What differentiates Honeycomb from its competitors?
Honeycomb can deploy teams as large and effective as most large accounting and consulting firms, but it does so as a wholly specialised and dedicated practice committed to client service. This means that all staff are trained and qualified forensic accountants and investigators. The work is partner-led and our goal is added value to the decision making and problem solving our clients require. As a boutique firm, we have no conflicts of interest so that clients can be assured that we have their interests in mind at all times.
Could you tell us a bit about Honeycomb International?
Honeycomb, although based in London, has instructed on many cases which are international in scope. Boutique forensic investigation firms, however entrepreneurial and agile, will be able to compete more effectively on this international stage when part of a worldwidenetwork. That’s why we have established Honeycomb International, an international network of independent, boutique and entrepreneurial forensic accounting and investigations firms.
At Honeycomb, we believe that cross-border cooperation of this nature is mutually beneficial, improving each firm’s profile, reach and agility, and expanding the scope of our capabilities. Member firms are better able to compete for work in their own territory, and will be able to collaborate and promote themselves jointly on cases originating in one country but involving work in others. Member firms also have access to trained staff where there is a need to bulk up teams on larger cases and are able to second staff to other member firms across the network to gain international experience
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