Sally Bai

Sally Bai has over fifteen years of auditing, forensic accounting, and consulting experience working on complex commercial litigation, corporate investigations, and regulatory disputes. Ms. Bai provides critical accounting and financial analysis to support experts and clients through all stages of litigation and enforcement actions.

Ms. Bai supports technical accounting and auditing experts in securities class actions, post-acquisition disputes, commercial litigation, and enforcement investigations and actions by the Public Company Accounting Oversight Board (PCAOB) and Securities and Exchange Commission (SEC).

In addition, as a specialist in complex forensic accounting, Ms. Bai brings deep expertise to investigations into corporate misconduct and financial irregularities. She has experience developing damages models using complex accounting data and performing flow-of-funds reconstructions in matters involving various investment structures, including Ponzi schemes.

Ms. Bai is qualified as a chartered professional accountant in Canada (CPA CA).

Technical accounting and auditing

Ms. Bai applies technical accounting expertise to evaluate compliance with financial reporting standards such as U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), internal control frameworks, and auditor liability issues in high-stakes enforcement and litigation matters. Her representative experience includes:

• Addressing issues of auditor independence related to the provision and reporting of certain non-audit services
• Evaluating timing and causes of potential damages in an accounting malpractice dispute
• Analyzing financial records and internal documentation for a private video game developer to determine if principal versus agent revenue accounting was appropriate under generally accepted accounting principles (GAAP)
• In Omni Logistics LLC v. Forward Air Corporation, analyzing documentation and internal control processes to determine the timeliness of financial disclosures
• Reviewing contracts and financial records in a post-acquisition dispute involving an insurance company
• Analyzing the financial information of a large conglomerate to address alter ego issues
• Evaluating whether certain costs for an oil and gas company were appropriately capitalized in compliance with GAAP
• Reviewing and analyzing executive compensation accounting for a public vehicle manufacturer
• Assessing GAAP compliance of financial statements prepared for the acquisition of a private aerospace company in a Representations and Warranties Insurance (RWI) claim
• Analyzing purchase price accounting determinations in a securities class action
• Evaluating audit work papers related to fair value testing of level 3 investments to assess generally accepted auditing standards (GAAS) compliance
• Evaluating audit work papers for accounts receivable in a PCAOB investigation involving professional standards
• Analyzing internal financial records for two public technology companies to evaluate GAAP treatment for inventory and cost of goods sold during abnormal production
• Assessing the standard of care of senior management in a regulatory matter through detailed reviews of journal entries and internal documentation
• Evaluating the operating effectiveness of internal controls over financial reporting and revenue recognition in a securities class action

Corporate investigations and forensic accounting

Ms. Bai has experience identifying financial irregularities and evaluating internal control frameworks to address fraud and asset misappropriation allegations. Her work in these contexts includes:

• Reviewing financial records and internal communications for a private, family-owned business to evaluate potential misappropriation of company assets
• Conducting a detailed review of journal entries in a regulatory investigation to evaluate if accrual accounting indicated earnings management
• Reconstructing accounting records and analyzing internal communications to identify indicia of fraud in a private arbitration involving an accounting firm
• Reviewing internal documentation and financial records for a bank accused of aiding and abetting a Ponzi scheme
• Tracing gasoline purchases and sales for a global oil trading company in response to allegations of futures contract manipulation
• Tracing funds and assets through various accounts to determine sources and uses in misappropriation disputes
• Conducting forensic reviews of transactions and operating agreements for a real estate investment dispute

Commercial litigation and damages

Across multiple industries, Ms. Bai has extensive experience assessing breach of contract and quantifying damages and lost profits claims in commercial disputes. Her experience includes:

• Reconstructing fund flows and analyzing transactional data to identify sources and uses of investor cash in bank-related litigation
• Analyzing class-wide damages and evaluating hedge fund records for Ponzi scheme characteristics in a securities class action
• Performing data analytics and financial analysis of internal records to build financial damages models for a multinational medical technologies company
• Analyzing fraudulent transfers and reconstructing fund flows to perform cash tracing for a multinational food corporation

Thought leadership

Ms. Bai coauthors Cornerstone Research’s annual report on Accounting Class Action Filings and Settlements.

Before joining Cornerstone Research, Ms. Bai worked for nearly a decade at Deloitte, in both the Forensics and Disputes and Audit and Assurance practices. She led U.S. and international teams in providing forensic services to clients, including Foreign Corrupt Practices Act (FCPA) compliance assessments, fraud risk management, and financial reporting and internal control testing.