On Thursday morning, as I was getting ready to go to work, a Planet Money news story came on about the United States Department of Justice Antitrust Division. The Antitrust Division filed a complaint to stop the merger of the two beer companies Anheuser-Busch InBev and Groupo Modelo. Planet Money’s Caitlin Kenney began the piece by talking about what is needed to build a murder case – ballistics experts, medical examiners and so on. She then went on to say that if you are trying to determine whether an economic crime has been committed you need economists. “You need forensic accountants,” I muttered. An economic, or should we say financial, crime is a financial affair that will most likely end up in a court of law. That is the essence of what financial forensics are all about.
Caitlin then spoke about how the economists at the DOJ’s Antitrust Division analyze whether or not the merging of two companies will result in a reduction in competition. The Antitrust division’s team of economists evaluate whether or not businesses are behaving in anticompetitive ways. In addition to an economic research of whether the actions of businesses are contrary to free competition, when building cases, the Antitrust Division requests and goes through what could be millions of company documents, including emails, memos, business plans, and evaluate whether or not the businesses’ plans aim to kill competition. The process of combing through mountains of data related to an entity’s finances and emerging with straightforward information is the specialty of the forensic accountant.
I can’t blame Caitlin for not mentioning the important work of forensic accountants in antitrust cases; the Antitrust Division’s website speaks only of the lawyers and economists that are involved in resolving antitrust issues. If the Antitrust Division is not talking about what work financial forensic experts are doing, the only way a person could suspect that forensic accountants are providing their financial detective services to the Antitrust Division is if that person had an understanding of what forensic accountants do. The study of economic data and the interpretation of that data into opinions of whether or not a company is violating the economic principles of competition is, clearly, work best suited to an economist. However, the down and dirty investigation that involves combing through volumes of data and scrupulously following audit trails is the domain of a forensic accountant.
It was only when I actively searched for mentions of the involvement of forensic accountants in antitrust cases that I found them. At the conclusion of cases, when the Department of Justice issues its statement and thanks those who led to its resolution, the department has acknowledged, among others, “forensic accountants… who dedicated significant time and resources to investigating this case.” Alternatively, a search through documents on the DOJ’s site will unearth declarations filed that display the involvement of forensic accountants in antitrust cases. I’m thinking it is prime time for the input and value of the forensic accountant to be recognized.