February 24, 2014
David Glusman, Advisory Services Partner, Featured in NJBIZ Article, "Playing the Numbers."
By Mary Johnson
From finding fraud to calculating damage, forensic accountants are in great demand.
A longtime soap manufacturer in southern New Jersey decided to invest in some new machinery a few years back. Business was good, but company executives thought production could run a little faster.
As soon as the new equipment was installed, the soap started coming out black and gray, with a toxic smell. There was no salvaging anything.
It was a mess, and it came with a cost.
When the company decided to file suit in the matter, it had to determine just how high that cost was. Company executives ran the numbers on their own — and then they called in David Glusman, a forensic accountant, to make sure those numbers were right.
"The question posed to me was what did they lose? Or, the other way of putting it, what would their profits have been but for the fact that this soap came out bad?" said Glusman, partner in charge of the Philadelphia office of Roseland-based Marcum Accountants and Advisors. "And the first thing I have to say is, 'Your number doesn't appear to be right.'"
The company had made a significant mistake in its calculations, claiming it was owned much more than it really was. That may seem as if Glusman did the soap company a disservice — maybe they could get more cash out of the equipment manufacturer — but it's quite the opposite, he said.
When you go to court, you want to make sure your ducks, every last one of them, are in a very nice, very neat row, he said. That's how you win cases — or even better, force them to settle.
"You've always got to do the right thing," he said. "You only get a chance to do this kind of work wrong once."
That's because, in the type of work Glusman does, huge amounts of money are at stake for the companies that hire him.
If you thought accountants just do tax returns, you don't truly understand the profession. Accountants seemingly are involved in every aspect of a company.
And there's perhaps no better example than forensic accountants, who deal with a wide array of cases, from fraud investigations and prevention work, to damage calculations, business valuations and compliance issues. That can range from smaller matters, in the $10,000 range, to multimillion projects.