Businesses need money to operate. Without money, a business is unable to purchase equipment or facilities. Many people start businesses using their own money, but most people do not have the personal resources to get anything but a very small business off the ground. Some business owners get loans from family, friends or banks to finance their companies. Others seek out venture capital firms for the money they need. Another common way for businesses to raise money is to sell shares.
What Is a Share?
A share is a small piece of the company, offered for sale. If they want to sell shares, business owners will start by dividing the company into smaller pieces; each of these pieces is called a share. The business owners typically keep the majority of shares themselves, so they maintain a controlling interest in the company; the rest are available for sale. When an investor purchases a share, he or she becomes a partial owner of the company. Each share entitles its holder to a portion of the profits earned by the business. If a business is successful, the value of each share increases. Some shareholders elect to sell their shares for a profit; this is the basis for the stock market.
When Things Go Wrong
Sharing arrangements do not always go smoothly. When there are disputes between shareholders, most companies will attempt to resolve the dispute in-house. When the dispute cannot be resolved this way, the other shareholders may conduct a forensic accounting investigation. If there is a suspicion of criminal activity, law enforcement may get involved. In any case, the goal of the investigation is to determine who owns what portion of the company and how much these portions are actually worth.
Conducting the Investigation
To be certain that the investigation is fair and impartial; it must be conducted by a neutral party. A forensic accounting expert will conduct the investigation to uncover the truth. Sadly, the involved parties are likely to dispute even these findings. When the cases go to court, the parties will hire forensic accountant expert witness to support their positions.
Accounting expert witnesses for each side will verify the findings of the expert. In most cases, they will try to find flaws in the conclusions. Each side will build a case that demonstrates how they are in the right. In court, these accounting expert witnesses will testify. These witnesses are often the centerpiece of each side’s case.
Accounting expert witnesses must be well skilled in accounting. They must have a wide range of general accounting experience in addition to extensive experience relating to their specialty. Their qualifications may be questioned in court, and they will be extensively cross-examined. These experts must be able to express complex, technical accounting issues in terms that anyone can understand.
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Veriti Consulting, LLC’s professionals are expert testifiers and have provided expert witness testimony in a variety of cases throughout the U.S. Visit our expert witness page or call us today at 877.520.1280 for more information.
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