For good reason, forensic investigation is a world shrouded in secrecy, an arcane discipline in which watchwords such as confidentiality and discretion are gospel. Nigel Layton, the managing director of Quest provides a rare insight into this clandestine world as Quest handles a major project for the English Football Association.

Layton is on a high for various reasons when Accountancy Age meets up with him. He’s just returned from the cauldron of the San Siro stadium after watching his beloved Arsenal beat AC Milan and business is good.

He takes a refreshing stance on his company’s services. ‘The best result isn’t always: “I caught the bugger”. Sometimes if a client suspects fraud, to be able to say, “there isn’t one”, can be just as good. There is a reasonable expectation that if the evidence is there, we’ll find it, and that’s what we say to clients. You can’t give a guarantee. No one in our industry can.’

It’s been a week of milestones for Layton- on the day of the interview he is celebrating his 20-year wedding anniversary and it’s also been two years since Quest won the Premier League bungs investigation which was headed up by its chairman Lord Stevens. Quest has now been handed responsibility by the Football Association to audit the January 2008 transfer window. They have also been tasked with conducting an audit of the summer 2008 transfer window, useful publicity for a business which usually operates under the utmost secrecy.

‘I can’t say that I’ve acted for this company which has had a major fraud which cost it £25m. The last thing they want is for everyone to know about it. It took a long time to get to where we wanted because you do have to rely on word of mouth much more.’

When pressed on the minutiae of the FA job, Layton remains tight-lipped ­ client confidentiality is key. ‘We can’t disclose any details.’

Quest’s public profile has been given a boost by the football work. ‘The Premier League bungs inquiry has obviously enhanced our reputation for forensic accounting and forensic computing. If there’s a major job, we’re now on the proposal ticket whereas three or four years ago we might not have been.’

At the start, Layton admits that generating business was tougher than it is now.

Quest had its big break more than ten years ago when picking up its first major client by cold mailing 500 finance directors. ‘One of them passed it on to his internal auditor and called us up. It was a major fraud investigation, a procurement case, which involved catching a ring of people getting backhanders. That company is still a client to this day.’

But despite the boost of favourable publicity, assignments which are played out in the public arena have drawbacks. Conducting their business under the warts and all spotlight of public scrutiny means they’ve had to box clever. ‘It doesn’t affect how we do our work but you’re always cognisant of the fact that someone’s watching what you are doing.’

Quest has upwards of 50 projects on the go in Indonesia, Israel, Nigeria, India and beyond but it also conducts key operations closer to home. The company has just done an accounting review for an AIM quoted company, which grew quicker than their accounting protocols could keep pace with.

‘We had to go in and look at their accounting systems, recreate some of the accounts and review their accounting treatment and their internal controls. We’ve also just done a major online fraud investigation involving the abuse of tens of thousands of compromised personal credit card details.’

Online fraud investigation is now a key service line because Quest has put itself in the space to provide additional services for companies compromised by hackers. As well as looking at the online fraud and working out how it’s happened, Quest looks at controls to minimise the risk of it happening again. Staff then write the quantification report for the insurers. ‘So we’re p roviding a comprehensive service. There are sites that are insecure and have had data losses. When you’re purchasing online your details are at risk,’ Layton warns.

The investigations arm, especially the corporate fraud service is also booming and Layton has an interesting explanation for this: ‘The scope for procurement fraud is huge in terms of staff having bonus targets to achieve. Recently with a difficult market there has been more pressure on people to manipulate results if they want to get their bonuses ­ there’s more at stake and there’s more scope for wrongdoing.’

Quest was set up in 1996, but Layton cut his teeth in the accountancy profession at PricewaterhouseCoopers after joining in 1984, where he had five successful years in audit before moving into corporate recovery. He earned his spurs on what he describes ‘as the insolvency case of the decade’, and few would suggest that Layton is guilty of hyperbole in giving the Robert Maxwell affair that particular tag.

He was the link between the corporate recovery teams and the forensic accounting teams from PwC and worked with 43 creditor banks which had lost $3bn after the fraud. He then spent three years following the paper trail through the world’s tax havens in a bid to find the missing money. ‘That was fantastic experience for investigations and I really enjoyed that type of work.’

Throwing off the cradling arms of practice to strike out on his own was a calculated risk and Layton remembers his family’s reaction to his plans: ‘My father said “You’re mad. What are you doing? PwC’s a job for life.” Yes it was a big risk and a big jump but there was a part of me that said: “Let’s have a go because if I don’t have a go now, I never will.”’

He may well have been on track for a partner’s berth but he believes that making junior partner was ‘akin to reaching number 99 at Snakes and Ladders and then having to start again at number 2’.

‘An opportunity presented itself. In your life you don’t get too many huge opportunities and I recognised that this was one of them.’

Security conscious

Quest’s forensic accounting and financial investigations offering has brought it to the public’s attention but that’s just the tip of the iceberg in terms of its services. When Lord Stevens was appointed as chairman he brought with him ex-special forces officer Brigadier Dick Andrews who is now Quest’s CEO.

The company now provides security assessments for individuals and corporate offices. It also provides personal protection for executives and VIPs travelling overseas. ‘Security has become top of the agenda with the threat from Al-Qaeda’, says Layton.

In terms of the future, the company has expanded the forensic accounting department and also has some ‘very interesting developments’, in the pipeline for the security division.

Layton believes there’s still potential to be tapped and a lot of projects are coming to fruition. In three to five years time, the company may look to float, he says. Quest is starting to see the benefits of its reputational advantage and is seeing bigger and bigger engagements coming through.

‘We have a very good reputation in the sporting field in investigation and security. We’ve built a reputation in the industry and we’re in the perfect place to capitalise on that.’

A Quest investigation: The nuts and bolts

Online fraud is a major concern for businesses, credit card providers and consumers alike.

The company has recently been called in by an online retailer, which was hit with tens of thousands of attempted fraudulent transactions, totalling in excess of £60m.The fraudsters were in possession of, and attempting to use, compromised personal credit card details including the security numbers.

‘Sometimes the attempts were successful. On such occasions, the first any genuine card holder knew would be when the bogus transaction appeared on their statement,’ says Layton. ‘The card holder would then notify his credit card company who in turn would notify and charge the online retailer (or merchant) who was then liable for the loss.’

Quest was asked by the online retailer to review their transaction approval and internal control systems to work out where the vulnerabilities lay. ‘This was achieved by conducting thorough walkthrough tests and a review by our IT experts. We also conducted detailed investigations to ascertain how the fraud had happened and how items ordered could be delivered to addresses which were not the cardholder address.’

The investigation also meant liaising with relevant authorities, a courier delivery company and other organisations, which gives an impression of the scale of operations to be conducted. ‘Transaction approval processes have been improved in response to the attacks. The patterns evident from the attacks show them to have been initiated by highly organised groups operating across the UK,’ Layton added. ‘This is a very worrying finding for all on-line merchants.’