When a company is showing signs of distress, stakeholders will require more visibility and disclosure on how the company is managing its operations and its plans going forward.
The role of special accountant is to provide an independent review and reporting mechanism on an organisation’s financial activities, especially its cash flows. This provides creditors and lenders with the assurance that their interests are preserved and that cash utilisation is in the ordinary course of the business.
The scope of work in this area is always customised to the needs of the situation. The scope of a special accountant can be broad. Services can be individually or jointly provided based on the unique situations present as follows:
- Monitor and ensure the organisation's cash flows are properly accounted for in order to provide a clear picture of the source and application of funds
- Review the organisation's cash flow forecasts
- Act as a co-signatory for payments or implement approval mechanisms in certain scenarios as an added control to the organisation's application of funds
- Ensure the rights/interests of the lenders and creditors are preserved and no preferential treatment is given to any individual party
Independent financial review
- Review the financial and operational viability and feasibility of a business
- Recommend strategic options pursuant to the review
- Periodic review of debtor's financial position for lenders, creditors and stakeholders
- Review the feasibility and viability of major business decisions of the company, e.g. sale of assets and divestments of non-core business activities