A thorough analysis of the asset management sector reveals that it has become increasingly complex, making it difficult for firms to make informed and profitable decisions. As a result, asset managers are turning to forensic analysis – an investigative process that uses data-driven techniques to identify hidden trends and patterns in financial data. 

The five business objectives of forensic analysis

Identifying financial issues

When it comes to managing assets, there are a variety of financial issues that need to be considered. This includes everything from identifying and understanding the risks to ensuring proper financial controls are in place.

To start identifying financial issues, a risk assessment of the organisation's assets is conducted. The objective is to identify potential risks that could adversely affect the value of the assets. Once the risks have been identified, it is important to develop a plan to mitigate them. This may include putting in place financial controls such as insurance or establishing reserve funds. 

Detecting fraudulent activity

Fraudulent activity can come in many forms; the most common include the following:

-Billing for services not rendered

-Paying kickbacks for referrals

-Upcoding (billing for a more expensive service than actually provided)

-Unnecessary tests or procedures

If you suspect fraud within your organisation, it is important to take action immediately. Forensic analysis services could help detect and investigate fraud.

Ensuring regulatory compliance

There are always regulatory compliance issues to contend with in any sector, but those related to the asset management sector are especially important to keep in mind. This is because asset management companies are responsible for managing other people's money, meaning that if something goes wrong, there could be serious financial implications.

This is why it is so important for asset management companies to have robust forensic analysis services in place. By conducting regular forensic analyses of their business operations, companies can ensure compliance with the latest regulations.

There are many ways to conduct forensic analysis; the most common include data mining, document review and interviews with key personnel. By taking a comprehensive approach to forensic analysis, companies can clearly understand their compliance risks and take steps to mitigate them.

Valuing assets accurately

Forensic analysis is the process of identifying, quantifying and interpreting financial information to make sound decisions. In the asset management sector, forensic analysis services are used to value assets accurately and prevent fraud.

When valuing assets, forensic analysts take into account all relevant factors, including market trends, economic conditions and the company's financial history. They then use these to provide an accurate asset valuation. This valuation helps investors make informed decisions about buying or selling assets.

Optimising returns

The asset management sector is under pressure to improve returns while managing risk. Many firms have turned to forensic analysis services to identify potential areas of improvement and optimise their portfolios.

Forensic analysis is the process of reviewing an investment portfolio and identifying areas for improvement. This could involve looking at individual investments and the overall portfolio allocation.

There are a number of ways to approach forensic analysis, but all share the common goal of improving returns while managing risk. Many firms will use a combination of techniques, including the following:

- Reviewing historical performance data

- Conducting interviews and discussions with managers and other key personnel

- Analysing economic and market trends

- Stress-testing portfolios

While no two firms will approach forensic analysis in the same way, there are some common objectives. These could be grouped into three main categories: improving performance, managing risk and reducing costs.

Conclusion

Forensic analysis services can help businesses identify financial loss due to theft or fraud, ensure compliance with regulations and improve operational efficiency. Acuity Knowledge Partners’ specialised team of investment research analysts provides exhaustive reviews that focus on data that may have been overlooked in terms of sustainability and quality of cashflow and earnings. This helps detect possible manipulation or conflict of interest within an organisation.