Troy Dahlberg has led numerous large forensic accounting investigations in the US and internationally as a partner at HKA, Ernst & Young and KPMG, as well as the practice leader at Kroll. He has been engaged by outside counsel, boards of directors, audit committees, private equity, and governmental entities to perform forensic accounting investigations. Troy has served as a consultant and an expert witness in ICC, arbitration, and state and federal court matters.

What is it about valuation and investigations work that you find most interesting?

What interests me most about investigations work is that, rarely, are two matters similar. The uniqueness of these types of engagements gives me the opportunity to employ a lot of creativity and do a lot of problem-solving, both of which I greatly enjoy. 

What is the most effective way for counsel to work with forensic experts in complex, multi-jurisdictional investigations?​​​​​​​

The most effective way for counsel to work with forensic experts in these types of investigations is to bring in consultants and experts early on so they can assist in the discovery process. By obtaining the accounting, business, and financial information (e.g., records, correspondence, documents) necessary to complete the investigation, forensic experts can assist in the deposition of fact witnesses to obtain even more thorough information regarding significant aspects of the investigation. 

In your opinion, which area of forensic accounting is evolving the quickest, and how?

During the course of my career as a forensic accountant, I believe the area that has evolved the quickest is international accounting investigations. This is due to increased growth in businesses from around the world interacting and doing business, which includes transactions, deals, and acquisitions and mergers. Forensic accountants have to understand what business records look like in different countries and what accounting standards look like in different jurisdictions and government regulatory environments. Working in the United States or with a US company would require knowledge of GAAP accounting standards, whereas working in Europe or with European countries would require knowledge of IFRS accounting standards. 

How has the proliferation of sanctions regimes affected the investigations market?

There is much more awareness in the market due to the existence of international sanctions against fraudulent activity, such as the laws against bribery and corruption. Since many governments now have these sanctions, most businesses and companies take these types of allegations very seriously and are usually willing to devote the time and resources necessary to assist forensic accountants with the tools needed to conduct their investigations.

Have you noticed any changes in fraud and corruption cases in recent years?

The early 2000s saw more large fraud and corruption cases than in previous years because the Securities and Exchange Commission and the Department of Justice began working together in the white-collar crime space. These government agencies became quite active in investigating fraud and corruption involving large corporations. There were numerous failures in large companies such as Enron and Worldcom, where their actions had a significant impact on investors, and people began to take notice. In the United States, this brought about the passage of the Sarbanes-Oxley Act in 2002, which put pressure on the boards of public companies to increase their focus on internal investigations. Such legislation spurred many more major investigations for several years and, notably, the stakes were higher. White-collar crime was now criminalised. For the first time, corporate executives and other professionals were not only being fined and sanctioned but also prosecuted in criminal court. This translated to a potential prison sentence for those who did not plea out. 

How do you expect AI to impact the sector at large?

Currently, the use of AI in accounting investigations is in its infancy. Once AI tools are more developed and easier to use, they will assist accountants in performing their investigations. AI tools will not take the place of forensic accountants in performing investigations, but they will allow forensic accountants to conduct data analysis and achieve analytical results more quickly. 

What excites you most about the future of investigations work?

I am excited to put together my creativity and problem-solving skills; my experience of nearly 40 years in accounting and auditing; and the endless numbers of attorneys, companies, and businesspeople that I have worked with over the years to develop and conduct investigations and achieve useful results that will satisfy my clients’ needs.

What would you recommend younger experts do when looking to move into testifying positions?

I recommend that younger experts seek out senior forensic accountants with a track record of mentoring other professionals and who will recommend you to attorneys to testify when the situation is appropriate. These younger experts should work closely with such mentors on all aspects of the matter they are involved with, including developing testimony and deposition. This allows them to gain more experience and grow their confidence.