Forensic accounting support as a factor affecting success in the concordat process

Crises in national economies, currency fluctuations, various risks and uncertainties, and the rapid advancement of technology have led to the international movement of capital, which can have negative impacts on the life cycles of businesses. As a result of these sudden uncertainties, businesses may find themselves in financial distress even when they are otherwise capable of continuing their operations. The institution of concordat (composition) is a legal remedy applied to protect businesses facing financial difficulties from bankruptcy and to ensure the continuation of their life cycle. More specifically, a concordat is an agreement made between a debtor business and its creditors to repay debts within a specified timeframe and/or with a reduction. The third party to this agreement is the judicial authority, whose role is to protect the interests of both debtor and creditors in a balanced manner. The concordat aims not only to preserve the sustainability of businesses experiencing financial hardship but also to enable creditors to recover their claims in a more satisfactory manner than they would in the case of bankruptcy, thereby contributing to the national economy and employment. A concordat is a process with both financial and legal consequences and is commonly referred to in practice as the "pre-bankruptcy stage." In this context, a poorly prepared concordat plan can lead to the bankruptcy of the business. However, this is an outcome that all parties involved in the concordat process strive to avoid—indeed, the institution exists to prevent such outcomes. Therefore, a well-prepared concordat plan and effective management of the process can enable the debtor business to restore its financial structure. It is evident that the successful management of this process depends on forensic accounting, which lies at the intersection of law and finance. Forensic accounting is a profession that combines disciplines such as accounting, auditing, law, psychology, and sociology to examine commercial issues from a legal perspective. Especially in today's technological and economic environment, the increasing complexity of financial transactions has rendered traditional accounting and auditing practices insufficient, thus creating a growing need for this new profession. The concordat process is an agreement with both financial and legal dimensions. From the stage of testing the feasibility of the proposed plan at the time of the concordat declaration to its final approval, the role and contribution of forensic accounting are of great importance. Testing the reliability of the proposed plan, determining its applicability, carrying out all necessary activities to lead the business to success during the grace period, and ultimately ensuring that the concordat is successfully concluded for well-intentioned businesses—all of these summarize the contributions that forensic accounting offers to the concordat process. In the concordat process, forensic accountants serve as concordat commissioners appointed by the court to ensure the process is carried out on a solid legal and financial foundation. Considering the duties and responsibilities assigned to them under the law, it is clear that these commissioners function as forensic accountants. Therefore, managing the concordat process, ensuring its success, and doing so on a legal basis are responsibilities that can only be effectively undertaken by forensic accountants. Although the literature contains numerous studies on both concordat and forensic accounting, there is a lack of research specifically focusing on the role of forensic accounting in the concordat process. In this respect, the study is expected to contribute to the literature. The aim of this study is to reveal the role and importance of forensic accounting in the concordat process from the perspectives of forensic accountants serving as concordat commissioners, and to contribute to the development of effective forensic accounting practices that can enhance the success of concordats. In this study, in-depth interviews were conducted with eight participants serving as concordat commissioners to gather their personal experiences. The data collected from participants were interpreted using content analysis methodology. Based on the experiences of the participants, six main themes and nineteen sub-themes were identified through content analysis. The main themes were established by considering the shared areas of experience among the commissioners. In this context, the themes were structured around the contributions of commissioners to the concordat process, the challenges they faced, the forensic accounting methods they used, the core practices applied to ensure the success of the concordat, and their suggestions for the development of the profession. The sub-themes were designed to further elaborate on the main themes and to highlight specific points raised by the commissioners. The analysis revealed that concordat commissioners play a critical role in the success of the concordat process, undertaking various roles such as investigative accountant, expert witness, and management consultant throughout the process. The main themes obtained from the content analysis were detailed and examined based on the responses provided by the participants. These themes reflect the roles forensic accountants play during the process, the responsibilities they assume, the challenges they face, the methods they employ, and their suggestions for the improvement of the profession. The elaboration of the main themes was supported by sub-themes, and the areas emphasized by the participants were presented. The interview guide used in the study and the responses given by the participants were taken as the basis for the development of these themes and sub-themes.