Prepare Bank Records for a Forensic Accountant

Agree the Questions Before Preparing the Package

1. Write the factual questions the accountant must answer and confirm the preparation needed before anyone categorises every transaction.

Name the parties and entities, the relevant period and the intended use of the work. Identify whether the accountant is investigating transactions, advising privately or preparing evidence. For example, ask whether a disputed payment reached a related entity and what records support its stated purpose. Keep an allegation separate from that question.

Agree who extracts data, who reconciles balances and who decides disputed classifications. Ask whether an existing ledger can be used and which fields the accountant needs. Record the answer so the legal team and accountant do not commission the same extraction separately.

APES 215 Forensic Accounting Services distinguishes services according to their purpose and the expertise used. A transaction summary can involve expert evidence when its preparation uses specialised accounting knowledge. Calling a spreadsheet “data preparation” does not decide its professional status.

If the work will support evidence in the Federal Court of Australia, its expert evidence practice note requires the expert to explain assumptions, reasons and supporting material. The retained accountant remains responsible for the methods and assumptions adopted and the applicable report obligations. Give them the relevant court instructions with the brief.

Keep Originals and Record Where They Came From

2. Preserve each PDF as received and give it a stable reference in the handoff index.

For each file, record its received filename, source and account holder. Add the production reference, receipt date and any access or use restriction supplied by the legal team. Record whether it came from the client, a bank or another production. A filename alone does not establish who supplied the record.

Keep annotations, page rearrangements and converted files in a separate working area. If you create a clearer working copy, connect it to the original reference and explain the change. Preserve the received file even when a working version becomes easier to search.

Confirm how page references work. A reference to PDF page 4 can differ from the statement’s printed page 4. State the convention in the index so the recipient opens the intended page. Where a document has been redacted, identify the redacted copy and the access conditions for any retained unredacted version.

Build an Account and Period Register

3. List known accounts and the statement coverage actually supplied, then mark gaps before handing over the package.

Include each holder, bank, account type and identifying account reference. Record available periods and currency. Include closed accounts, related-entity accounts and foreign accounts where they bear on the questions. Distinguish a known account with missing records from an account whose existence is only suggested by a transaction description.

This fictional register illustrates the fields. Adapt these preparation fields to the accountant’s instructions.

Account reference	Holder and type	Coverage supplied	Gap or defect	Next action
A01	Example Trading Pty Ltd, transaction account	First and third statement periods	Second period absent	Paralegal requests missing statement
A02	Example Director, savings account	All three requested periods	One duplicate PDF	Preparer labels duplicate copy
A03	Example Trading Pty Ltd, foreign-currency account	Final requested period	Earlier coverage unknown	Solicitor confirms requested scope

Mark unreadable pages and partial statements as well as absent periods. A missing statement leaves activity unknown. It does not show that no transactions occurred.

Add an initial transfer register with a reference for each debit or credit, its possible counterpart and the matching status. Record an identified pair only where supporting records establish the connection. Leave an unmatched debit or credit visible, with the reason the match remains uncertain. Assign full bank-statement reconciliation to the agreed analyst when the brief requires tested balances or completed transfer matching.

Include Supporting Records and Unresolved Questions

4. Attach available explanations to disputed transactions and give each unresolved item a reviewer and next action.

Pair a payment with its available invoice, agreement or correspondence. A receipt might need payroll records, a loan document or a remittance advice. Cite the supporting record separately from the statement: the bank entry shows the movement, while another document can explain the claimed purpose.

Keep competing explanations visible. For a fictional $8,400 receipt, record that one party describes a loan repayment while another describes trading income. Attach the loan agreement or sales records available. Leave the classification open for the accountant’s analysis.

Use an exceptions log for uncertain transfer matches, duplicate extractions, balance differences and missing source citations. Each row needs an item reference, the affected record and a description of the problem. Add a named reviewer, next action and status. For example, assign an unexplained balance difference to the accountant and a missing PDF to the paralegal responsible for collection.

Do not hide an unresolved difference by adding an adjustment to make totals agree. Keep the source amount, proposed adjustment and explanation in separate fields, with approval status visible.

Choose What to Convert Before Handoff

5. Agree whether to send statements as held, supply an existing ledger or prepare a particular spreadsheet format.

When the accountant needs specified columns, use the agreed schema and preserve source references on every row. If an extraction already exists, provide it with its source files and preparation notes before commissioning a replacement. Keep corrections traceable to the original entry, with the reason for each change.

For outsourced groundwork, FinTrace saves lawyers and forensic accountants hours of statement conversion and review. You can supply PDFs as held, including scans, without sorting or renaming them. FinTrace returns a searchable Excel ledger and a clear findings report, with findings referenced to the source PDF filename and page. The accountant can use that groundwork for further analysis and specialist interpretation.

The handoff can contain both the received PDFs and the source-cited ledger. Label the ledger’s version and explain which supplied files it covers. Avoid silently combining overlapping extractions or replacing the source description with an assumed purpose. An accountant who requests a different arrangement can specify that before conversion begins.

Check the Accountant Can Use the Package

6. Check access and source retrieval with the recipient before treating the handoff as complete.

Use this final checklist for the agreed package.

• The instructions name the questions, parties, period and intended use.
• The account register shows coverage and missing periods.
• Received PDFs remain identifiable and separate from working copies.
• Supporting records connect to the disputed entries they explain.
• Converted rows retain source references and any preparation notes.
• The exceptions log names a reviewer and next action for each open item.
• Restrictions and the agreed transfer arrangements are recorded.

For a fictional acceptance check, use schedule item T17: a disputed $8,400 payment in file A01, PDF page 4. Ask the recipient to open that page from the supplied package and locate the entry. They must be able to connect the amount and account to the schedule without guessing which file was used. Then use the account register to identify the missing second statement period as the next record needed.

If the PDF is unreadable, request a clearer copy from the source and retain the received version with the defect recorded. If a source file is inaccessible, repair access through the agreed channel and have the recipient confirm it opens. For an unexplained adjustment, obtain the preparer’s reason and source support or keep it unresolved outside accepted totals.

Record the accepted package version and outstanding requests. Acceptance of the handoff means the accountant can begin the agreed work with visible gaps. The accountant’s later financial expert witness report has its own analysis and reporting requirements.

Choose the Financial Records That Answer Each Question

7. Add financial records because they answer a question in the instructions, with each record’s role stated in the index.

Different types of financial records answer different parts of the same dispute. A statement can establish a payment while leaving its purpose contested.

Question	Records to include	What the records help establish
What cash moved?	Bank statements and lender transaction records	Recorded receipts, payments and account movements
What was the payment said to cover?	Invoices and remittance records	Stated goods, services or allocation
What earnings were recorded?	Payroll records and payslips	Recorded pay, deductions and employment income
What rights or obligations existed?	Loan agreements and other contracts	The parties’ documented terms
How was the entry treated in the accounts?	General ledgers and financial statements	Recorded accounting treatment

Keep these records in distinct groups within the package. Original documents show what was received. Converted data supports filtering and calculations. The coverage register shows completeness gaps, while the exceptions log preserves disputed classifications. Together, they let the accountant see what can be used immediately and what still needs evidence.

If the task expands beyond the appointed accountant’s instructions, agree the additional work before preparing more data. The wider forensic accounting services guide explains the service scope. Send the accepted index with the package so the accountant can start from the agreed records and direct the next evidence request.