Have you been informed that your company is facing an investigation by “reporting accountants” or “investigating accountants”? If yes, this will have significant implications for your company.

This step, when taken by the bank, usually means you are already on the path to a restructuring, whether you wanted that or not. It is very important for you to retain control of the process.

We strongly recommend that if the Bank has appointed their own adviser, being the Investigating Accountant, then you need to have your own adviser that will look after your interests.  If you are in this situation why not CALL US NOW  for CONFIDENTIAL FREE ADVICE.

Read on if you’d like to understand more about Investigating Accountants. There is more information below on these common questions:

  • What is an Investigating Accountant (or “IA”)?
  • What is the role of a Investigating Accountant?
  • What will an investigating Accountant cost?
  • Will I have input into the Investigating Accountants report?
  • Will I see the Investigating Accountants report?

What is an Investigating Accountant (or “IA”)?

When a business has financial or operating difficulties it can often breach its borrowing facilities from the bank or from factoring companies. This can lead to bounced cheques, problems with the payments of direct debits or missed loan repayments.  Banks have quite sophisticated systems for monitoring this risk, but often they are “in the dark” with regard to the up to date financial performance of the company that owes it the money. One way of addressing this is for a bank to have the ability to demand detailed and up to date information from your company. The loan agreement you have signed will usually allow for this. So if a bank has concerns over the quality or timeliness of information they have received regarding your company they may appoint an Investigating Accountant.

Who can you get to help?

You can get assistance from your internal or external accountants. But you should keep in mind that you have just entered The Restructuring Spectrum, even if you did not want to. You need your own restructuring expert to so that you will lead the process rather than being forced to follow the path set by the bank. Clearly the path chosen by the bank will be the path with least risk and better returns for the bank. That may not be for the benefit of the company.

We can help your business prepare a restructuring plan that maximises the outcome for you whilst taking account of what the bank will need from the process. Remember, you’ll be paying for an expert anyway because the bank will make you do so. So you might as well retain your own adviser. We have worked with dozens of companies and advised them how to plan their actions when the bank starts putting pressure on the facilities and is asking for investigating accountants. We are also known to the banks and will present your plans to the bank. In that way, you may avoid having to pay for the banks investigating accountant or at least significantly reduce the cost of their report.

Our view is that you should go to the bank with the solution not the problem!

So if your company is getting pressure from the bank or its Investigating Accountant, then contact us now using one of the methods shown on the right hand side of this page.

What is the role of an Investigating Accountant

The brief for an Investigating Accountant (IA) can vary to suit the situation but will usually cover the following:

  • Cashflow, daily and for say the next 12 months month by month;
  • Current profit and loss activity, previous results and forecasts for say the next 12 months month by month;
  • Performance against your past forecasts;
  • Creditors and Tax debts with an emphasis on whether they are being paid on time;
  • Debtors and current assets with an emphasis on their quality and collectability;
  • Quality of the financial reports;
  • Business and marketing plans.

The IA will then write a report for the lender to outline the options the lender should consider and what their recommendations are. The options they cover will basically be the Solutions mentioned in this website.

We strongly recommend that if the Bank has appointed their own adviser, being the Investigating Accountant, then you need to have your own adviser that will look after your interests. If you are in this situation why not CALL US NOW for CONFIDENTIAL FREE ADVICE.

What will an Investigating Accountant cost?

The cost of an Investigating Accountant can vary widely. It can vary from a few thousand dollars for a one day “Quick-and-Dirty” review to $50,000 for a medium size business with some complications.

But one thing that is for sure is that the bank will insists that the company pays for the IA.

You will have little choice but to agree as it will usually be allowed for in the loan documentation.

We strongly recommend that if the Bank has appointed their own adviser, being the Investigating Accountant, then you need to have your own adviser that will look after your interests. If you are in this situation why not CALL US NOW for CONFIDENTIAL FREE ADVICE.

Will I have input into the Investigating Accountant’s Report

The Investigating Accountant will usually come to your business and spend between a day and a week reviewing your company and then provide a written Report to the Bank.

So the Report that goes to the Bank is authored by the Investigating Accountant. The Investigating Accountant will get the vast majority of its information from you and your company’s records.

So do you get input into the Report? Well you don’t get to write the Report but you will be providing the information to the Investigating Accountant. In that way you can influence the information in the Report.

We recommend that you cooperate fully with the Investigating Accountant but ensure you put your views across forcefully with good information to back up your views. If you have not got the level of information described above then you must get it done before the IA completes their version.

We strongly recommend that if the Bank has appointed their own adviser, being the Investigating Accountant, then you need to have your own adviser that will look after your interests. If you are in this situation why not CALL US NOW for CONFIDENTIAL FREE ADVICE.

Will I see the Investigating Accountant’s Report?

Best practice by an Investigating Accountant, who is usually an Insolvency Practitioner, would be to provide you with a copy of, at the very least, the factual aspects of the report so that you can verify, correct or challenge the contents.

Usually the IA will provide the bank with a specific recommendation on what to do about your company and you may not get to see that part of the report. We strongly recommend that you forcefully request access to at least the factual parts of the report. The bad news is that some Insolvency Practitioners will not use best practice and may not provide you with any of the report. So you may pay for the report but not get to see it.

We strongly recommend that if the Bank has appointed their own adviser, being the Investigating Accountant, then you need to have your own adviser that will look after your interests. If you are in this situation why not CALL US NOW for CONFIDENTIAL FREE ADVICE.