It’s an Iterative Process

Written by: Erica Johnson, CPA, ABV

In my first few weeks at Cogence Group, my colleague (Eli Neal) and I were tackling a forensic accounting project together. The Company’s management was concerned of possible fraudulent activity, and we were given a broad task to review the financial information to see whether anything was out of the ordinary. Management provided us a copy of the Company’s QuickBooks files, an assortment of financial records, and a plethora of other mixed documents. The sheer amount of information and inherent ambiguity as to what exactly we were looking for felt daunting.

At least for me, finding a starting point can be one of the most challenging parts of an assignment. Where do you begin when you don’t know what the beginning is? What components are going to be the most important to focus on when you don’t know the full picture? As I struggled to find a place to begin our analysis, Eli said something to me that was both helpful in that moment and has stuck with me to this day: “it’s an iterative process.” This statement has proven truthful and necessary, remained relevant, and has become a sort of a mantra for me throughout every engagement.

Here are a few reasons I’ve identified for why an iterative process can be helpful and/or necessary in certain circumstances.

1. Brainstorming

The first idea or solution is not always the best. Sometimes, it can be more beneficial to approach the situation from a few different angles before venturing too far down one path. Working collaboratively is important when brainstorming as employees with different ideas, perspectives, and expertise can work together to find innovative solutions, which in turn allows us to solve problems in a faster and more effective manner.

2. Efficiency

Oftentimes, investigative engagements such as the one described above have an unclear “beginning.” To me, this feels like writers’ block. In these situations, it can be more efficient to put together an imperfect array of information with the intention of making incremental tweaks as I gain more context. This prevents me from spending excessive time dwelling on figuring out the “perfect” way to approach the issue in that moment. As a perfectionist, I use this technique often – leaving myself notes on areas to revisit.

3. Missing Information

Every engagement is different and the specific documents we need to perform our analysis can vary considerably. While we do our best to request the information we think we need for our analysis at the onset, inevitably we do not know everything that is needed until we begin working through the data. There are many reasons for this, but an initial iteration through the analysis can help us to identify questions, missing information, or gaps which would have been difficult to uncover without first beginning the analysis.

4. Disaggregation

In large, multi-faceted projects, to keep things from becoming too overwhelming, it is sometimes most beneficial to break down the analysis into smaller chunks. Once these smaller sub-analyses have been sorted through, I can then decide how they best fit together. Oftentimes, this practice of breaking down the analysis into more digestible pieces is not just beneficial to me as I’m building out the analysis, but it also provides more clarity to the client and/or attorney to understand our analysis.

5. Evolution

Our work evolves as projects progress – this is particularly true in litigation engagements, some of which can take years before they end up in court. Based on the facts and circumstances learned and/or later information made available, the final analysis rarely aligns exactly with what was initially envisioned at the beginning of an engagement.

Recently, I was working on an engagement which changed trajectory several times in the few weeks we spent putting together our analysis. I was again reminded of the iterative nature of our work and was thankful that we had created a dynamic model which allowed us to change course efficiently.

At Cogence Group, we put our heads together – working collaboratively to solve complex problems to get the job done right. The path to solve these problems is not always straightforward, and that’s why you should count on experience you trust. Call Cogence Group today to learn more about our experience in forensic accounting.