Spotlight on forensic accounting: Perspectives from BDO Auckland’s new Associate Director

How does New Zealand’s forensic accounting landscape compare to the UK? According to Michael Smith, Associate Director in BDO’s Forensic Accounting Services team, there are some key similarities.

Michael recently joined BDO’s highly experienced Forensic Accounting Services team in Auckland, bringing a wealth of expertise from over 15 years of accountancy experience in London.

Below, he shares his views on the role of a forensic accountant, the process for engaging with forensic accounting services, and how the operating landscape differs between New Zealand and the UK.

“The role of a forensic accountant is broad and there’s a huge range of cases that crop up.”

As the global and local risk landscapes evolve, businesses must remain alert to threats to their integrity and reputation. Forensic accounting can play an important role in this.

BDO’s forensic accounting services cover litigation and dispute resolution, investigations, and fraud and corruption risk management. Michael says this broad range of services helps businesses to identify and effectively resolve their issues.

“Disputes can be between individuals, companies, or even governments, and may be part of a formal litigation or alternative dispute resolution process,” says Michael. “There can be a wide range of claims, from breach of contract and business interruption to shareholder disputes and valuation arguments, but essentially we get involved in any case where there are disagreements about numbers or accounting interpretations.”

In formal litigation or arbitration, forensic accountants prepare expert reports and may testify in court or before a tribunal. Meanwhile, investigations usually address allegations of fraud, bribery, corruption, or other misconduct. They involve interviews, data analysis, and asset recovery. A report is then produced for disciplinary actions, litigation support, or reporting to regulators.

“At a high level, forensic accounting is fairly similar across New Zealand and the UK.”

Michael’s London experience spans more than a decade of forensic work, including disputes in civil litigation and international arbitrations, and financial, fraud, bribery, and corruption investigations. While he says his London clients tended to be larger multinational corporations, the type of work is similar to New Zealand, with disputes and investigations common to both.

“Since coming to New Zealand I’ve worked on fraud investigations, matrimonial disputes involving company valuations, solvency business reviews, and forensic audits. I’ve noticed a mix of business sizes in the New Zealand market, with types of clients spanning everything from small New Zealand companies to large international operations. In fact, I’ve found that the range of clients and industries is far wider in New Zealand than in London,” says Michael.

Forensic accounting can arise in any sector, and Michael has worked on cases involving manufacturing, construction, renewable energy, pharmaceuticals, shipping, textiles and more. In New Zealand, the agribusiness sector plays an especially large role.

“The variety of work here is really interesting and we help a wide range of clients with an array of issues,” he says.

“The earlier we can be appointed in any legal process, the better – but it’s crucial to get legal advice too.”

When engaging a forensic accountant, Michael says time is of the essence.

“The most challenging scenario is when we’re appointed late in the process after the case has been pleaded and a preliminary estimate of the quantum of loss has been made. In those cases, we often lack sufficient time to conduct the detailed analysis required to prepare an expert report.”

Michael notes it’s important to appoint legal representation early in the process - ideally before engaging with a forensic accountant, as it’s vital for the case to be properly framed in the right legal context from the outset.

"We’ll typically be appointed directly by companies or individuals, or their instructing lawyer. We’re often just one of the parties appointed by the client, and in investigative cases, we may also work with law enforcement agencies.”

“Technology plays an increasingly important role in forensic work.”

Forensic accounting often requires the analysis of large datasets. Technology - specifically AI - can play a key role in this process.

“We’ve had cases where there are millions of rows of data. It would be impossible to analyse this cost-effectively without using technology,” says Michael. “Tools like Alteryx, Copilot and PowerBI are increasingly commonplace – but it’s vital to check the output of any generative AI tool you use. It will be interesting to see how technology evolves in forensic accounting over time.”

BDO provides forensic accounting services to organisations of all sizes, their counsel, and their stakeholders. Learn more about our forensic accounting services here.