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  • Writer's pictureKen Yormark

Magnitude's Leona Laurie and I Discuss the Intersection of Crisis Management and Forensic Accounting

Updated: May 24, 2023

Crisis Communications: Reputation & the Effects of Financial Investigations

Ken Yormark has seen first-hand the importance of solid crisis communications when organizations are subject to financial investigations. Ken is a CPA and a CFE with over 30 years of experience in forensic accounting and financial investigations, and he can bear witness to how much worse the kinds of situations he deals with are for organizations that don’t have a crisis communications plan in place quickly to mitigate reputational damage. He spoke with our president, Leona Laurie, about his work and how the truths his investigations reveal have affected his clients. Leona: Ken, when I heard about your career I thought, “Oh that sounds so interesting.” Is that the response you usually get? Ken: Yes, it is. That response has changed over time. When I first started telling people I did forensic accounting, they thought I did tax returns for dead people. Leona: Ha! Can you in brief explain what it is you actually do? Ken: I use my accounting skills, along with investigative skills, to deep dive into matters where there is litigation or potential litigation– where we’re trying to figure out the flow of funds, what’s happened within an organization, whether there were accounting improprieties, whether fraudulent activity took place. And if there was: who did it, how it was done, and the magnitude. Leona: It might not seem obvious to everyone, but there are real opportunities for your work in forensic accounting and Magnitude’s work in crisis communications to intersect. Ken: You are right on point. There’s no question, there are times when we will work with PR firms where we’re trying to deliver the perfect message to the public. Or even working with a PR firm or marketing firm to put together a statement where we focus on every single word within that statement to deliver the proper message to the public. So it’s very, very important, and it becomes critical at certain stages within an investigation. I’ve seen companies where they did not do the right thing regarding presenting the facts in a fashion that it should have been sent out to the public, and they ultimately were on the defensive as a result of that, which can be really problematic. Leona: We have seen over and over that any crisis can be made exponentially worse by the way that it’s handled once it goes public. Ken: Yes, there’s no question that the delivery is critical. And you would know this probably better than anybody about timing of it and the way that it is positioned to the audience that you need to present it to, whether it’s regulators or it’s your shareholders, your board, or the public themselves. Leona: You mentioned something about a whistleblower situation you had been privy to. I would love to hear more about that. Ken: We worked on a case relating to a university where they had received a whistleblower accusation about the president of the university using school funds for personal benefit. We reviewed the books and records, and we found some really troubling findings, which were clear indications that the president had done some of the things that the whistleblower had accused them of doing. So we went back to the board and delivered some messages to them, and one of the things that I was vehement about was that they should deliver this message in some way shape, or form to the public. When we provided key details to the board, we found this information being delivered to the press. Literally, The Washington Post was publishing articles that were regurgitating some of the things that were said within our discussions, and it became a real crisis for the university. We were walking into their offices and there were pickets outside asking for the president to resign, and it became a volatile situation for the university. They could have handled it so much better if they had properly delivered a message and done it expeditiously. With not-for-profits, it’s really a challenge for them to recover from things like this because people donate funds because they believe in the organization and that every dollar they contribute will be used in a way that will help the organization. And here we’re showing that over $500,000 was used improperly. It was a real challenge for them. Leona: It’s so easy for me to imagine situations like that, where you get called in and someone’s reputation is going to be at risk as a result of what you do. But are there situations where your work results in a reputational advantage to an individual or organization? Ken: I think the institution or the company, or potentially the management of that organization, can come out looking very well. I recently had an instance with an organization where the newly hired director called us in because of some concerns she had discovered. We subsequently fired the CFO and the company’s controller because they were mismanaging and self-dealing, and the director–the new director–came out smelling like a rose and showed the initiative necessary to put things right for the company. Leona: Have you found yourself in situations where your work has vindicated somebody and cleared someone of wrongdoing in a way that, again, warranted some sort of messaging internally or externally to the effect of “this situation is clean”? Ken: Absolutely. As a matter of fact, those are interesting matters for us to work on, because if you can picture the situation where they have an instance where they think that there’s a problem, they bring us in and we can’t substantiate it. That can be frustrating for some but vindication for the individual, the company, or the subsidiary. Leona: Are there any areas where you’re seeing an increase in financial impropriety that could require crisis communications? Ken: One that really jumps out at me right now is sports leagues where I’m finding that there are issues within those entities because of the ramping up of gambling. All it takes is one or two instances to dilute the credibility of that league, and those leagues need to think about how to control the problems that could potentially occur. Unfortunately, I find that many entities don’t do anything until they’ve had a problem. Preventive matters are not being used as much as they should be, because it’s the scenario of “if it ain’t broke, don’t fix it,” and the appearance from the outside that if you start to put additional controls in place, you must’ve had a problem and that’s why you’re doing it. Leona: An ounce of prevention. Ken: Exactly. Leona: Ken, I’m so grateful to you for making time for me today. Thank you so much. Ken: It was my pleasure. For more information regarding Ken’s services, please visit

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