Litigation Support & Alternative Dispute Resolution Glossary
Alternative Dispute Resolution
When a dispute arises, disputing parties often turn to the courts and legal professionals for resolution of their differences. When the intervention of a court is desired, resolution is decided by a judge or jury. Alternative dispute resolution (ADR) encompasses a variety of processes to resolve disputes through dialogue and understanding, with the assistance, or in some cases based upon a determination by, trained professionals.
Forensic Accounting and Analysis
Forensic Accounting is investigative accounting and is distinct and apart from traditional accounting, auditing and tax services. Forensic Accounting requires an in-depth knowledge of financial transactions coupled with
a deep understanding of how businesses operate.
- Economic Loss Analysis
When one party is injured physically, in terms of reputation, or by virtue of a wrongful act, there is often a related financial loss, such as loss of profits or wages. Drawing upon our knowledge of finance and taxation, we prepare analyses for counsel calculating the extent of such losses.
- Breach of Contract Analysis
When one party to a contract alleges that another party to the contract has violated the contract in some way, there is typically a related claim financial loss. Drawing upon our knowledge of finance and taxation, we prepare analyses for counsel calculating the extent of such losses.
- Fraud & Embezzlement Analysis
Many cases involve missing money resulting in one party being disadvantaged. Forensic Accounting seeks
to recreate and analyze historical records to demonstrate how the fraud or embezzlement was carried out and how much money was involved.
- Insurance Claims Analysis
The ability to file an effective insurance claim is dependent on the quality of the financial records supporting the claim. Forensic Accounting develops the presentation and supporting documentation to back the claim and Forensic Accountants can assist in the meetings with the Insurance Claims Specialists.
- Electronic Data Discovery and Analysis
Discovery includes not only paper documents, but the plethora of communications and data stored in electronic form on computer hard drives, and many other devices with storage capability. Using a variety
of sophisticated tools, this information can be harvested to get a more extensive understanding of communications and transactions.
- Shareholder and Partner Disputes
These disputes center around one party's opposition with the financial conclusions of the other party or parties. This failure to agree, combined with personality differences, often result in complex dispute situations requiring the hiring of attorneys. Forensic Accountants are then typically brought in to analyze the financial situation, whether it be analysis of disputed transactions, or valuation of an entity for purposes of buying out the aggrieved party.
Testifying Expert
Forensic Accountants are utilized to objectively prepare and present conclusions regarding the numbers behind a dispute. Very often, Forensic Accountants will be required to have their deposition taken and to testify at trial on behalf of clients. These services are provided upon appointment by the court, through
agreed neutral retention by the disputing parties, or through retention solely by one party to the dispute.
Consulting Expert
Forensic Accountants are often privately brought into disputes on behalf of one party. Their advice, based upon knowledge of valuation, finance, systems, taxation, etc... is sought to help the party or their attorney
sort through the various components of the dispute and privately prepare financial analysis on behalf of the client. These analyses are used as a basis to formulate strategy, and to negotiate a settlement.
Arbitration
Arbitration is the process of resolving a dispute through the use of an impartial decision maker, or arbitrator. The arbitration process includes use of expert derived financial information and testimony with respect to valuation, losses, damages, etc... EZKR is available to provide the expert analyses, or to serve in the capacity of a fully trained arbitrator.
Mediation
Mediation is the process of resolving a dispute through the use of a facilitator. The mediation process includes use of expert derived financial information and testimony with respect to valuation, losses, damages, etc... EZKR is available to provide the expert analyses, or to serve in the capacity of fully trained mediator.
Collaborative Divorce
Collaborative divorce is a new way for couples in conflict to end their marriage in a non-adversarial manner outside of the traditional court system. Working in an open multidisciplinary team approach, collaborative legal, mental health and financial professionals use understanding, respect and education to help both parties achieve a fair outcome for themselves by themselves, while also putting the needs of their children first. Needs and concerns of the parties are respected, while children are represented throughout the process.
EZKR collaborative financial specialists, by virtue of membership in the New York Association of Collaborative Professionals and the International Association of Collaborative Professionals, have been trained to work in an interdisciplinary manner, and have completed substantial training in mediation and the collaborative process.
Business and Asset Valuation
While business and asset valuation is often undertaken for transactional, compliance and planning purposes,
it is often an essential part of a dispute being resolved through litigation, mediation, arbitration or collaborative practice. Our trained business valuation professionals, all members of standards based organizations, assist disputing parties, their counsel and advisors to understand the value of a business or asset based upon the prevailing standard, or definition, of value required.
Corporate Recovery Services Glossary
Cash management
Develop a cash management system to monitor cash on a daily basis. Prepare and monitor detailed 13 week, 3 month and 6 month cash flow
projections on a roll-forward basis.
Profit improvement plans
Analyze operations, profitability, costs and expenses. Develop short-term and long-term action plans. Monitor and update
regularly. Help stop the bleeding.
Accounts receivable management
Develop an accounts receivable system to monitor accounts receivable and their collection on a daily basis.
Purchases and accounts payable management
Develop a system to monitor purchases and accounts payable on a daily basis. Assist in the negotiation of payment terms with vendors.
Hidden and underutilized assets
Search for hidden or underutilized assets that could be sold to raise cash.
Inventory management
Analyze and determine proper inventory levels. Assist in the determination of slow moving inventory that can be sold to raise cash.
Restructuring of balance sheet
Prepare detailed analysis of balance sheet. Determine what should be sold, what should be abandoned and what debt could be restructured. Meet with lenders and assist in debt restructuring/alternative financing options.
Communications
Establishment of a program and guidelines to keep lenders, vendors, key customers, employees and other stakeholders informed.
Protecting management from itself
Meet with management; discuss dos and don'ts so as to avoid personal liability.
Reorganize, sell or liquidate
Assist management in the determination of whether to reorganize, sell or liquidate. What is the right choice- bankruptcy vs. out-of-court or workout?
Bankruptcy Glossary
Pre-filing assistance
Provide assistance during the pre-filing stage, including gathering of information needed for filing, determining potential liabilities of officers and directors, risks to management. Assist counsel in the development of first day orders.
DIP financing
Assist management in the preparation of needed information. Assist in the negotiations with potential lenders.
Cash management
Develop a cash management system to monitor cash on a daily basis. Determine cash needs. Prepare and monitor detailed 13 week, 3 month and 6 month cash flow projections on a roll-forward basis.
Accounts receivable management
Develop an accounts receivable system to monitor accounts receivable and their collection on a daily basis.
Purchases and accounts payable management
Develop a system to monitor purchases and accounts payable on a daily basis. Assist in the negotiation of payment term with vendors.
Profit improvement plans
Analyze operations, profitability, costs and expenses. Determine causes of financial failure. Develop short-term and long-term action plans. Monitor and update regularly. Help stop the bleeding.
Hidden and underutilized assets
Search for hidden or underutilized assets that can be sold to raise cash.
Operating Reports and other filings
Assist management in the preparation of monthly Operating Reports and other court required filings.
Solvency analysis and expert testimony
Prepare solvency analysis and if required provide expert testimony.
Recovery actions
Investigate potential preferences and fraudulent transfers. Assist counsel in their recovery.
Executory contracts
Assist management in determining whether to assume or reject its leases and other executory contracts.
Claims review and analysis
Review and analyze claims filed by creditors to determine whether to be reduced, reclassified or exponged.
Plans of Reorganization/Liquidation
Assist management in the preparation of the plan reorganization or liquidation and related disclosure statement. Assist management in the preparation of feasibility and liquidation analyses.
Communications
Establishment of a program and guidelines to keep lenders, creditors, key customers, employees and other stakeholders informed.
Creditor and Creditor Committee accountants / financial advisors Glossary
Cash collateral and cash management
Review and monitor cash collateral. Evaluate debtor's cash management system. Review and monitor debtor's cash needs and cash flow projections.
Review of books and records
Review the debtor's books and records to identify areas of concern.
Review of controls
Review the debtor's controls so as to safeguard its assets.
Investigation of causes of failure
Determine the causes of the financial/operational failure. Assist in the development of procedures to limit further impairment of the debtor's assets.
Investigation of the debtor and its management
Determine if the debtor and/or management acted improperly.
Evaluation of Operations
Evaluate and monitor debtor's operations; determine that the debtor is operating efficiently and in the best interest of creditors.
Operating Reports and other reports
Review and monitor the debtor's Operating Reports and other filings with the court.
Recovery actions
Investigate potential preferences and fraudulent transfers. Assist counsel in their recovery.
Communications
Establishment of a program and guidelines to keep lenders, creditors, key customers, employees and other stakeholders informed.
Solvency analysis and expert testimony
Review debtor's solvency analysis. If necessary, prepare alternative solvency analysis and if required, provide expert testimony.
Plans of Reorganization/Liquidation
Review debtor's plan of reorganization or liquidation. Assist in the preparation of alternatives or Committee's plan. Review/prepare feasibility and liquidation analyses.
Negotiations
Assist counsel in negotiating with the Debtor, the plan and distributions to creditors.
Chapter 7 Glossary
Review of books and records
Review the debtor's books and records to determine if there are assets available to satisfy claims of creditors.
Marshalling of assets
Assist the trustee in marshalling the debtor's assets.
Investigation of the debtor and its management
Determine if the debtor and/or management acted improperly.
Solvency analysis and expert testimony
Prepare solvency analysis, and if required, provide expert testimony.
Recovery actions
Investigate potential preferences and fraudulent transfers. Assist counsel to the trustee in their recovery.
Claims review
Assist the trustee in the review of creditor claims.
Preparation of tax returns
Prepare tax returns on behalf of the trustee.
Valuations Glossary
Buy/Sell Agreements
Enforceability of buy/sell agreements often requires that there be a reasonable basis for the agreed upon value of the business interest, and that the value be updated with the passage of time. Determination of value is also important to acquire an appropriate amount of an associated buy/sell life insurance policy.
Impairment of Goodwill (FAS 142)
Accounting Standards require that goodwill be tested to ensure that its existence and value has not been impaired, with the passage. A formal appraisal is required to make such a determination.
Purchase Price Allocation (FAS 141)
Accounting Standards require that purchase price be allocated among various components, including goodwill. A formal appraisal is required to make such a determination.
Business Succession Planning
An important aspect of a business succession plan is understanding the existing value of the business, and the impact on value if ownership of the business changes hands, or if management and control of the business changes.
Planning for Growth and Exit Strategies
For many business owners, essential questions are how does one ultimately tap into the accumulated wealth built up in their business, and what is the value of their business. Moreover, if a sale is to be accomplished at a later date, how can the current value be increased through business growth. A formal business appraisal provides answers to these questions.
Shareholder and Partner Disputes
These disputes center around one party's opposition with the financial conclusions of the other party or parties. This failure to agree, combined with personality differences, often result in complex dispute situations requiring the hiring of attorneys. Forensic Accountants are then typically brought in to analyze the financial situation, whether it be analysis of disputed transactions, or valuation of an entity for purposes of buying out the aggrieved party.
Liquidation-Reorganization
For a business in financial distress, a critical question is whether to liquidate or to reorganize. Once answer to the question involves valuation of the business and assets.
Estate and Gift Tax Planning and Compliance
Many closely held business owners transfer some or all of their interests during their lifetime, while others transfer their interests upon death. Business valuations are prepared to help business owners and their tax counsel develop a plan for transfer of the business interests. Business valuations are also prepared to meet estate and gift tax return business valuation requirements of the Internal Revenue Service.
Matrimonial Disputes / Divorce, including Expert Testimony
An essential element of many matrimonial dissolutions is the question of the fair market value of the marital component of businesses, licenses and degrees. We provide these services to parties who are using the court system, as well as those utilizing alternate avenues of dispute resolution such as collaborative practice and mediation. Our valuation professionals have also been appointed to do this work by Order of the court. Where cases cannot be settled, we provide expert testimony with respect to valuation of businesses, licenses and degrees.
Mergers and Acquisitions
A central question in merger and acquisition transaction are issues pertaining to valuation. This includes exploring the differences between financial buyers and strategic buyers, and values obtained in similar transactions. In mergers and acquisitions, forensic accountants are often engaged to present "what if" scenarios in addition to due diligence services. These services included the calculation of combined operations and the presentation of prospective cost savings, economies of scale and redundant processes.
Audits Glossary
Commercial audits
The highest level of financial statement service that can be provided by a CPA. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. All audits are designed to provide reasonable assurance about whether the financial statements are free of material misstatement. EZKR tailors the audit approach for each specific engagement based on our industry experiences which enables us to complete our assignments with minimal interruption to the client's everyday business.
Not-for-Profit audits
Not-for-profit organizations have their own special needs. For example, NYS requires all not-for-profit organizations with gross receipts of $250,000 or more to submit an annual audit report, and organizations with gross receipts between $100,000 and $250,000 to submit an annual review report. EZKR has the ability to recognize the organization's needs, and the industry expertise to fulfill them. We work with all types of not-for-profit organizations including, but limited to: social and human service organizations, professional and trade associations, low income housing developers, foundations, and charitable entities.
401k audits
The Department of Labor has been granted regulatory authority over all employee benefit plans. Large plans, as they have been defined, are required to attach annual audited financial statements to their tax returns. A large plan is generally any plan that has more than 100 "eligible" participants. Eligible does not mean participating.
Pension audits
In addition to 401k Plans, employer funded plans such as profit sharing and defined benefit plans also fall under the audit requirement imposed by the Department of Labor. The penalties for failure to comply with these requirements are severe, $1,000 per day for each day that the plan is not in compliance.
Co-op and Condominium audits
Often required as part of an offering plan, these entities are faced with unique challenges and reporting requirements that differ from a commercial entity. EZKR has years of experience dealing with Co-op's and Condominiums. A number of our staff members have experience sitting on boards, which gives us a unique perspective when we were are called upon to audit the books and records maintained by a management company.
Reviews and Compilations
Reviews - The second highest level of financial statement service that can be provided by a CPA. A review consists primarily of inquiries of company personnel and analytical procedures applied to financial data. Often times a bank or lending company is lending company is willing to forego audited financials statements, if the borrower has a well know highly respected accounting firm issuing a review report.
Compilations - The lowest level of financial statement service that can be provide by a CPA. A compilation is limited to presenting in the form of financial statements information that is the representation of management. The information provided by management is not being verified, corroborated, reviewed and/or audited. Compilations are useful as a management tool and can be prepared monthly or quarterly depending on the client's needs.
Yellow Book and A-133 audits
Often called "Yellow book" or "A-133" audits, any organization which spends more than $500,000 of Federal funds in any year, is required to undergo an audit which conforms to Government Auditing Standards (Yellow book). EZKR is experienced in performing these audits. In fact, every accountant who works on a Yellow book audit takes forty hours of continuing professional education (CPE) every year, and 24 hours of specialized CPE every two years.
Cost Certifications
EZKR is experienced in performing cost certifications required by the NYS Division of Housing and Community Renewal (DHCR) and NYC Department of Housing Preservation and Development (HPD) required to obtain the IRS Low Income Housing Credit Allocation and Certification, Form 8609. We are also able to prepare the financial information reports required to obtain tax exempt bond financing.
Accounting & Tax Service Glossary
Income tax return preparation and planning
At EZKR our approach to all individual and business Income Tax Return Preparation begins with planning. We start the process by listening to our clients' needs and goals. We help our clients to understand the tax implications of their financial decisions and work to minimize their tax burden. Our extensive experience includes federal and multi-state returns and preparing specialized filings for US based foreign-owned entities, Not-For-Profit organizations and private foundations.
Estate, Trust and Gift tax return preparation and planning
EZKR works with attorneys, individuals, executors and beneficiaries to navigate and manage the financial, tax and personal complexities of trusts and estates. Whether it's business succession or the controlled transfer of wealth and assets to your spouse and children, our experts can assure that a trust or estate is structured properly financially, taxes are minimized and the value is protected and delivered.
EZKR Trusts and Estates Services include:
• Pre & Post Mortem Planning
• Surrogate Accountings
• Trust Accounting
• Gift & Estate Tax Planning & Returns
• Fiduciary Income Tax Returns
• Charitable Giving Trusts
• Business Valuations
• Business Succession Plans
• Forensic Accounting
• Litigation Support Services
Low Income Housing tax credits
EZKR has years of experience in all areas of low income housing. This includes meeting the special needs of low income housing tax credit partnerships, as well as a myriad of NY State and NY City sponsored housing programs.
Reviews and Compilations
Reviews - The second highest level of financial statement service that can be provided by a CPA. A review consists primarily of inquiries of company personnel and analytical procedures applied to financial data. Often times a bank or lending company is lending company is willing to forego audited financials statements, if the borrower has a well know highly respected accounting firm issuing a review report.
Compilations - The lowest level of financial statement service that can be provide by a CPA. A compilation is limited to presenting in the form of financial statements information that is the representation of management. The information provided by management is not being verified, corroborated, reviewed and / or audited. Compilations are useful as a management tool and can be prepared monthly or quarterly depending on the client's needs.
Empire Zone tax programs
Qualified Empire Zone Enterprises are eligible for sales tax exemption, real property and business tax credits. EZKR has years of experience in all areas of Empire Zone tax preparation including: Wage tax credit, Investment tax credit, Employee incentive credits, Real property tax credit, Tax reduction tax credit, Sales tax refund, Sales tax exemption, Zone capital credit, and Utility rate reductions.
Fiduciary accounting
This is a specialized accounting prepared on behalf of trustees or executors who have been charged with the responsibility to oversee trust and or estate funds. A fiduciary accounting may be submitted to either the beneficiaries (informal accounting) or to the surrogate's court (formal accounting). Upon acceptance of the accounting, the trustees and executors are granted a release from liability for all transactions reflected in the underlying accounting.
Internal accounting department functions
Our staff of trained Business Services professionals provides on-site, remote point-of-entry or after-the-fact bookkeeping, payroll and sales tax preparation or related administrative duties to assist companies to operate their business without the necessity of hiring and managing employees and providing benefits.
