Lepage Marcil David Forensic Accountants inc.

Forensic accounting is the application of accounting science to dispute resolution and investigating fraud and other financial crimes.

Forensic accounting encompasses three main areas of service: fraud and other financial crime investigations, litigation support and business insurance claims.

Fraud and other financial crime investigations relate to financial irregularities that may take place in private business, the public and para-public sectors, in a personal, family or estate context, in a matrimonial dispute, etc. The services generally consist of shedding light on what happened, identifying the scheme(s) used and the people who implemented them, quantifying the amounts involved, and collecting and preserving the evidence. It can also involve risk analysis and the implementation of preventive measures. These services may also include preparing expert reports for insurers, police authorities, or the courts and providing expert testimony before the courts (civil, criminal, penal, or administrative).

Litigation support generally consists of various services offered in the context of litigation aimed at supporting legal professionals in their duties, such as identifying and analyzing relevant accounting and financial documents, preparing questions for the parties' representatives who perform financial and accounting functions or the opposing party's expert(s), quantifying the damages claimed, valuing companies involved in such disputes, determining notional income and net worth in matrimonial disputes, writing expert reports and providing expert testimonies before the courts.

Business insurance claims consist of identifying and analyzing relevant contractual, financial, and accounting documentation related to insured events, quantifying damages claimed as loss of profit or business interruption and other insured losses, preparing, following up and providing support in settling the insurance claims. These services may also include preparing an expert report and providing expert testimony in court when insurance claims cannot be settled amicably with insurers.

The title "Forensic Accountant" is not a designation reserved for a specific professional body in Canada, like the titles of lawyer (Me, Mtre), Chartered Professional Accountant (CPA), or physician (MD).

Only the Canadian and provincial institutes of Chartered Professional Accountants (CPA Canada, CPA Quebec, CPA Ontario, etc.) define forensic accounting engagements and impose specific standards of practice on their members who accept such engagements.

Standard Practices for Investigative and Forensic Accounting Engagements  

In addition to adhering to their code of ethics, all CPAs in Canada who accept engagements that qualify as forensic accounting engagements under the standards published in this regard by CPA Canada must comply with these standards in carrying out their engagements. These standards were developed to enhance the practice of CPAs conducting forensic accounting engagements and protecting the public. Therefore, these standards assure the public that

forensic accounting engagements conducted by CPAs meet the high-quality standards required by their professional bodies.

In contrast, any person who uses the title "Forensic Accountant"; who is not a member in good standing of CPA Canada, or a provincial CPA institute is not subject to any standards of practice. Some people even use the title "Forensic Accountant" when they have no specific accounting or financial investigation training.

Consequently, if you wish to retain the services of a person subject to standards of practice published by a recognized professional body to carry out a forensic accounting engagement in Canada, you must ensure that this person is a CPA who is a member in good standing of CPA Canada or a provincial CPA institute.

Some CPAs have also completed specialized training offered by their professional institute, which has conferred the designation of Specialist in Investigation and forensic accounting (CA•IFA). The same is true for CPAs who have completed specialized training offered by the American Institute of Certified Public Accountants, which has conferred the Certified in Financial

Forensics (CFF) designation. Finally, several professionals have also completed training offered by the Association of Certified Fraud Examiners and obtained the Certified Fraud Examiner (CFE) designation.

At LMD, all professionals assigned to forensic accounting engagements are CPAs who are subject to CPA Canada's standards of practice for investigative and forensic accounting engagements and CPA Quebec's Code of Ethics. In addition, the senior partners all have the CA•IFA and/or CFF and/or CFE designations.

- André Lepage FCPA, CPA●IFA, CFF, CFE

- Luc Marcil CPA, CPA●IFA, CFF

- Alain David, CPA, CFF, CFE

• Investigations: Fraud and other financial irregularities

• Litigation Support

• Business Insurance Claims

• Computer Forensics

• Other Services

LMD is a boutique firm whose managing directors have all been leaders of forensic accounting practices in large accounting firms offering diversified services such as financial statement auditing, forensic accounting, taxation, management consulting, financial advisory, bankruptcy and insolvency and transactional services.

One of the problems encountered by large, diversified firms is found in the many conflicts of interest that inevitably arise when the time comes to accept a forensic accounting engagement or even during the course of an engagement, not to mention the presence of large structures that result in higher professional fees, further increased by administrative fees that can reach between 5% and 7% of the professional fees invoiced.

The managing directors at LMD have chosen to leave these large structures to launch a boutique firm that allows them to devote themselves entirely to their common passion, the practice of forensic accounting. This approach virtually eliminates conflicts of interest and is characterized by a business model that promotes efficiency through the judicious use of the right resources in the right place at the right time. This business model allows LMD to offer services at competitive rates while eliminating administrative fees.même expertise, compétence et expérience que ceux des grands cabinets dans lesquels les associés principaux œuvraient par le passé et ce, à moindre coûts.

Therefore, LMD's clients benefit from the same expertise, competency, and experience as those of large firms where LMD’s managing directors have previously practiced forensic accounting at a lower cost.

The process to retain our services includes the following steps:

• First communication during which we conduct a preliminary discussion of your file: the parties involved, the services required, our ability and availability to accept the engagement, our professional fee structure and, if applicable, the timeline to do so. This first communication usually occurs by phone call.
  

• Before proceeding, in accordance with our standards of practice, we conduct a conflict-of-interest search regarding the parties involved in the file. As we are a boutique firm, our conflict-of-interest searches are completed very quickly.
  

• When the absence of a conflict of interest is confirmed, we schedule a meeting to have a more elaborate discussion that covers all aspects of the file, the parties involved, the services required, the work approach we are considering, the deliverables, the timeline and an overview of potential professional fees. This meeting is usually held by virtual conference (Team, Zoom) or, when more appropriate in the circumstances, as part of a face-to-face meeting.
  

• When you and we agree on the terms and conditions of the engagement you wish to entrust to us, in accordance with our standards of practice, we prepare a draft letter of engagement that describes our understanding of the facts, the nature of the services required, the proposed work approach, the timeline, and the terms and conditions of our professional fees.
  

• If you are assisted by legal counsel for the purposes of your case, our services are generally retained by the latter so that you can benefit from solicitor-client privilege. In such a case, our engagement letter is addressed to your legal counsel, with the proviso that you remain responsible for the payment of our professional fees. This draft letter of engagement is then forwarded to the appropriate parties for review.
  

• Following the revision of the draft, the final version of our letter of engagement is issued and forwarded to all parties concerned for signature.
  

• At LMD, we generally require an advance on professional fees that varies according to the scope of the work to be performed.
  

• Once the letter of engagement has been duly signed by all parties involved and the advance on fees has been duly paid, our work begins according to the terms and conditions set out in the letter of engagement.
  

• We remain available to answer our clients' questions throughout the course of our work.

Our fees are invoiced based on the actual time spent by the professionals assigned to each case. Our hourly rates vary according to each professional's experience. Our fees are subject to all applicable taxes (GST and QST), which are charged extra.

The professionals at LMD are categorized as advisors, senior advisors, directors, senior directors, and managing directors, each with a specific hourly rate. Our rates are usually updated at the beginning of each calendar year.

We invoice our fees at the end of each month, which are due upon receipt of our invoices. Interest at a rate of 15% per annum is added to unpaid fees from the 31st day following the date of the invoice.

Expenses such as travel, meals, and accommodation incurred in connection with our engagements are invoiced separately. LMD does not charge an administration fee.

We are occasionally asked to provide estimates of potential fees based on our experience in similar matters. When we do so, we clearly describe the major factors upon which our estimates rely and explain that such estimates are not to be construed as fixed-fee engagements. Any change to the conditions of the engagement may result in a change in the estimated fees, and LMD is not legally bound by such estimates.

At LMD, we take issues related to the confidentiality and protection of our clients' documents very seriously.

LMD always protects the confidentiality of its clients and never mentions their identity on its website, even if this information may be in the public domain (court judgments, newspaper articles, etc.). The LMD website does not contain any section that reproduces or summarizes the comments of appreciation or evaluation of its professionals received from its clients. This information is strictly confidential and is never published. LMD never discusses the identity of its clients and never comments on its engagements to journalists.

Documents received from clients are archived using a proven, end-to-end encrypted solution used by organizations subject to the strictest data security standards, such as financial institutions, insurance companies, large accounting and law firms, and the medical and hospital industry, to ensure the greatest possible security and protection. LMD's data archiving solution uses servers that are compliant with the American Institute of Certified Public Accountants ('AICPA') SSAE16 standard.