A whistleblower accounting probe.
- 01$95mRevenue under review
- 02860kDocuments reviewed
- 035 monthsInvestigation length
- 04SECSecurities regulator
Our team was appointed by the audit committee’s counsel after a whistleblower alleged that regional managers had inflated patient-services revenue—an investigation turning on billing practices, estimates of collectability and whether senior management knew of the adjustments.
The question
The whistleblower claimed that year-end adjustments had overstated revenue at several clinics to meet bonus targets. The committee needed to know whether the allegations were true, how far any misstatement extended, and whether the company’s prior financial statements could still be relied upon.
Our approach
We analysed claim-level billing data across every clinic, comparing recorded revenue with subsequent cash collections and payer denials. Targeted e-mail review and interviews with finance staff tested who had directed the adjustments, while findings were shared progressively with the external auditor to avoid reporting delays.
The findings
The analysis confirmed that allowances for uncollectable claims had been understated in four regions, concentrated in the final weeks of each fiscal year. There was no evidence that executive management had directed the adjustments, but review controls had failed to detect a clear and recurring pattern.
The outcome
The company restated two prior quarters, strengthened its revenue-review controls and took personnel action in the affected regions. It self-reported to the regulator, which closed its inquiry without enforcement action, and the external auditor signed off on the annual accounts on schedule.
Investigations that work alongside the auditor, not after it, keep the reporting calendar intact.