Economic scrutiny

There are situations when banks, regulatory authorities, or unscrupulous counterparties behave inappropriately. To address such situations, you will need the assistance of leading economic experts to get to the bottom of the loan agreement, inspection reports, invoices, etc. by explaining every letter and number.

Our experts are certified by the Ministry of Justice of Ukraine and have obtained relevant certificates of qualification as forensic experts in the following fields:

11.1 "Research of Financial, Tax Accounting and Reporting Documents"

The key tasks of the scrutiny of financial, tax accounting and reporting documents are as follows:

determining the documentary evidence of the amount of shortage or surplus of inventory and cash, the period and place of their formation;
determining the documentary evidence of transactions associated with the receipt, storage, manufacture or sale of inventory, including cash, fixed assets, and services;
determining the documentary evidence of cash and securities accounting;
determining the documentary evidence for recording transactions related to the accrual and payment of wages and other benefits;
establishing compliance of the tax accounting of income and expenses on financial and business transactions subject to income taxwith applicable laws;
determining compliance of the tax accounting of tax liabilities and VAT tax creditwith applicable laws;
audit actions (determination of any economic indicators by expert economists without prior documentary checks of the financial and economic activities by the controlling entity) are out of the scope of the economic scrutiny.

An indicative list of issues to be addressed:

Is the shortage (surplus) of cash in the till in the amount of (specify the amount) at the companies (specify the name of the entity) for the period (specify) documented in the inventory report dated (specify the details of the report) confirmed?
Is the shortage of inventory items established by the inventory report at the companies (name of the entity) for the period of work (specify the period) of the financially responsible person (specify the full name of the person) in the amount of (specify the quantitative and cost indicators) documented?
Is the lack of fixed assets (name of the organization, quantitative and cost indicators)documented?
Is the amount of wages unreasonably paid and debited from the cash register of (name of the entity) confirmed in view of the data provided by the body (person) that ordered the scrutiny (engaged the expert) and did the handwriting examination conclude that the signatures in the payment documents on receipt of wages (number of the statement, period) were not made by the persons indicated therein?
Were travel expenses reasonably reimbursed (indicate to whom and for what period) (in what amount)?
Are the audit findings documented (indicate the audit report details) in the part associated with the overstatement of the scope and cost of the work performed in view of the findings of the other types of scrutiny?
Is the unjustified write-off of construction materials, accrual and payment of wages for overstated scope and cost of work performed (in view of the findings of the other types of scrutiny) documented?
Is the amount of debt for goods and materials supplied to (name), work performed (services provided) under the contract (number and date of the contract) for the period (specify the period), including the findings of the other types of scrutiny, documented in the claim of the plaintiff (name of the entity)?
Is the understatement of the object of taxation (specify the entity) for the period (specify the period), as well as additional taxes and mandatory payments to the budget (specify) indicated in the tax inspection report (specify the report details) confirmed by documents?
Does the income determined and declared by the companies (name) for the period (specify the period) corresponds to the primary documents provided and the requirements of the Tax Code of Ukraine?
Do the expenses determined and declared by the companies (name) for the period (specify the period) comply with the primary documents provided and the requirements of the Tax Code of Ukraine?
Are the expenses of the companies (name) for the period (specify the period) that form the cost of goods sold, work performed, or services provided documented?
Is the depreciation charge for the period (specify the period) reflected in the tax accounting of the company (name of the company) documented and regulated?
Are the volumes of business transactions and settlements with non-residents documented?
Are the conclusions of the state tax inspectorate report (number, date) on the company’s (name) overstatement of the claimed amount of budgetary refund of the value added tax for the period (specify the period) supported by documents?
Is the financial result of transactions with securities and corporate rights of (company name) for the period (specify the period) in the amount of (specify the amount) documented in the state tax inspectorate reportconfirmed?
Чи підтверджується документально визначений об’єкт оподаткування з доходів, виплачених підприємством (назва підприємства) нерезиденту (назва) із джерелом його походження з України у періоді (вказується період)?
Is the application of the zero rate of value added tax on export transactions under the contract (number, date) by the company (name) documented?
Similar questions can be asked about the other types of taxes and mandatory payments.

11.2 "Research of Documents on Economic Activities of Companies and Organizations"

The key tasks of the scrutiny of documents on economic activities of companies and organizations are as follows:

determining the documentary evidence, analyzing the financial condition indicators (solvency, financial stability, profitability, etc.);
determining the documentary evidence for the analysis and structure of the property and sources of its acquisition;
determining the documentary evidence of the status and intensity of the use of current assets and sources of their formation;
determining the documentary evidence and analyzing the sources of own funds, as well as financial and economic performance;
establishing documentary evidence and analyzing general and special funds;
determining the documentary evidence and analyzing whether settlements with debtors and creditors were actually made;
determining the documentary evidence and analyzing the economic feasibility of obtaining and using loans and borrowings;
determining the documentary evidence and analyzing the costs and prices as factors of financial stability and breakeven performance;
determining the documentary evidence for calculations during privatization and lease using the current methods of privatized property valuationand other issues related to privatization and bankruptcy of companies;
determining the documentary evidence for the calculation of a share of property when a participant withdraws from the group of founders;
determining the documentary evidence for calculations of lost earnings (due to late payment of disability compensation and in other cases);
determining the documentary evidence for the spending of budget funds as intended;
determining the documentary evidence for the calculation of lost profits;
addressing the issues related to the bidding committees’ compliance with laws governing the procurement of goods (works and services) for budget funds is out of the scope of the economic scrutiny.

An indicative list of issues to be addressed:

Determine the main economic indicators (liquidity, solvency and profitability) of the economic and financial activities of (specify the entity) as of the date of conclusion or expiration of the agreement (specify the details). How do these indicators characterize the economic and financial activities of the (specify the entity)?
Is the amount of the contribution to the authorized capital made by (entity or participant) and the calculation of the amount of the property to be returned to the participant who withdrew from the group of founders (date of withdrawal) documented?
Is the amount of damage from unreasonable underpayment (non-payment) of rental (specify the entity) for the period (specify the period) documented and if so – in what amount?
Does the value of the real estate objects (specify) subject to privatization include the share of financing of the structures by public funds in accordance with the constituent and primary documents provided?
Are the conclusions of the audit report on the misuse of budget funds received by the company (name) under the budget program (name of the program) documented?
Is the calculation of pension payments to individual (full name) made by the institutions of the Pension Fund of Ukraine for the period (date) documented?
Do the indicators of the financial and economic condition of the company (name) for the period (specify the period) show signs of bankruptcy, fictitious bankruptcy, or hidden bankruptcy?
Are the conclusions of the audit report regarding the existence of wage arrears at the company (entity) (name) as of (specify date) confirmed by documents?
Did the company (name) have the financial ability to pay the accrued wages in full (or partially) during the period (specify the period) at the expense of its own working capital, in view of the priority of payments established by regulatory requirements?
For what purposes were the funds of the company (name) spent during the period when it had wage arrears towards its employees?
Did the spending of funds of the company (entity) (name) for production needs during the year lead to a reduction in wage arrears as of (specify the date). If so, what amounts of funds were used for current wages and what amounts were used to cover wage arrears accrued during previous periods?
Is the calculation of dividends payable made by the company (name) to the issuer of corporate rights (business name of the legal entity or full name of an individual) for the period (specify the period) documented and regulated?

11.3 "Examination of Documents on Financial and Credit Transactions"

The key tasks of the scrutiny of documents on financial and credit transactions are as follows:

determining the documentary evidence for banking transactions for opening accounts and cash flows on accounts;
determining the documentary evidence for the processing and accounting for transactions related to the issuance, use and repayment of loans;
determining the documentary evidence for registration and accounting for financial and economic activities by banks;
determining conformity of the reflection of financial and business transactions of banks to accounting and reporting regulations;
determining the documentary evidence for recording financial and business transactions related to the accrual and payment of taxes by banks and their conformity to accounting and reporting data, as well as applicable laws;
establishing the circle of persons responsible for ensuring compliance with regulations on banking accounting and supervision.

An indicative list of issues to be addressed:

Are the conclusions of the audit report on conformity of the documentation of (name of bank) on loan granting operations, completeness, accrual and payment of interest for the use of loans by the borrower (business name of the legal entity or full name of an individual) under the loan agreement (number, date) to applicable laws supported by documents?
Does the list of documents provided to the bank by the company (name) to raise a loan under the loan agreement comply with the current Lending Regulations?
Is the value of the assets (property) of the company (borrower) pledged as collateral under the loan agreement documented?
Is the amount of the bank's losses determined in the audit report (indicate the subject of control) as a result of unjustified extension or non-repayment of a loan under the agreement (number, date) documented?
Is the misuse of the loan under the agreement confirmed by accounting and primary documents (number, date)?
Is the bank’s (name) compliance with the relevant insurance reserve contribution requirements documented?
Does the calculation of the borrower's debt (loan interest and principal repayment) to the bank available in the case file comply with the terms of the loan agreement concluded between the parties and the settlement documents for the issuance and repayment of the loan under the respective loan agreement?
Does the bank's method of calculating interest under the loan agreement (indicate the agreement details) comply with Lending Regulations of the bank (indicate the name of the banking institution)?

Together with the scrutiny order document (letter of expert engagement), the expert shall be provided with accounting and tax accounting documents containing the source data for answering the questions. Such documents may include receipt and spending bills, orders, reports of materially responsible persons, warehouse accounting cards, cash books, inventory materials, audit reports, time sheets, work orders, acceptance certificates, employment contracts, payrolls, bank statements, payment orders and claims, liability agreements, accumulative (turnover) statements, ledgers, memorial orders for balance sheet accounts, general ledgers, balance sheets, as well as other primary and summary financial and tax accounting and reporting documents.

If the accounting was carried out in electronic form, the expert shall be provided with printed accounting registers, which must be certified in the prescribed manner.

If a scrutiny is ordered to verify the findings of a desk audit, the scrutiny order document (letter of expert engagement) shall specify which findings are challenged and why (contradict other case files, are not convincingly substantiated by financial inspectors, etc.).

It is recommended to consult an expert economist to determine which documents should be submitted to the expert for scrutiny in each particular case.

Documents should be organized chronologically (by relevant periods), filed, bound and numbered.