Forensic Accountants Make It Add Up
25 July, 2012
USA
Corporate fraud, insider trading, 9/11, intellectual property infringement the list goes on as to instances where parties have committed acts resulting in financial losses. The legal challenge in proving financial wrongdoing is a minefield in itself, but what steps need to be taken when documenting economic damages?
Many insurance companies, law firms and attorneys, on both sides of the court room, now retain forensic accountants to guide them through the process of quantifying monetary losses scouring financial records, spreadsheets and other data to piecing together a detailed analysis of provable economic damages.
In the legal arena, forensic accountants are used as both experts and consultants. An expert provides an objective opinion in court and is not necessarily an advocate of the client. A consultant advises the attorney and client as to facts, issues and strategy, identifying strengths and weaknesses in the case, and is considered a client advocate.
There are three primary benefits forensics accountants bring to the litigation table that in the end will serve to strengthen a case. These include:
- Accurately assessing damages
A good forensic accountant can quickly analyze the other sides demand for damages and identify weaknesses in their damage measurement. If early settlement is the objective, such information will assist the client in steering his or her opponent to a reasonable amount, saving all parties time and money. - Providing expert witness testimony
While a good expert will listen to input from the attorney regarding the case, forensic accountants are most valuable when they are able to identify strengths and weaknesses to theories put forth by the client. The forensic accountant, as the expert, must then formulate his or her own opinion, independent of the attorney, and feel comfortable in communicating the opinion to all parties.
- Ensuring a solid case with strong communication skills
While technical expertise is important to a forensic accounting expert, it is also critical to be able to communicate verbally and in writing, both to the attorney as well as to a judge and jury.
The challenges of proving a case involving sophisticated financial analysis can be greatly alleviated with the assistance of an effective forensic accounting expert. Such an expert can serve as consultant, providing invaluable preliminary insight and advice, or if needed, an expert witness whose opinions are presented convincingly to an opponent.
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