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Tips for litigators on working with forensic accountants

Sep 01, 2021

Forensic accountants exist at the crossroads of finance and the law. A qualified forensic accountant will understand the law, rules and impact of the expert opinions that may ultimately affect your case.

Most of your typical accountants prepare tax returns, provide attestation services relative to an entity’s financial statement (audit, review, compilation, etc.) or consult in  one of those two areas. A forensic accountant, however, can be retained to calculate economic damages or investigate potential embezzlement and relay those findings to the trier of fact.

These services require not only a very detailed analysis but also the ability to confidently and competently communicate opinions to non-accountants.

Working with a competent forensic accountant can be a rewarding experience for attorneys and their clients if done properly. But it can also be a waste of money when the forensic accountant is excluded from testifying due to a court ruling.

Here are some steps litigators can take to be more successful with forensic accountants.

Hire early

Hiring a qualified forensic accountant early in the litigation allows them to help with strategy, discovery and rebuttal of opposing experts. Providing the documents the accountant needs in the best format can minimize costs. Leverage their experience to avoid mistakes.

Do at least a minimum level of investigation of your expert. You know the opposing side will do so, and you don’t want to be caught surprised. Ask for referrals from attorneys that have seen them testify.

A litigator should trust their instincts when communicating with a potential forensic accountant. People assess and size up an individual within the first few seconds of speaking with that person. The forensic accountant needs to come across as honest and experienced with the topic at hand to gain the confidence of the trier of fact. In your first time speaking with a potential forensic accountant, if they don’t come across as confident or do not communicate well, you will be better served to continue your search.

Share your narrative

Most litigation is best explained to the trier of fact as a story. The forensic accountant is a narrator of the financial portion of your story. If they understand how they fit into the story, they can plan their work product to dovetail smoothly into your story.

Alternatively, they can help you understand the story the financial records are telling in case you need to adjust your story to match the known facts. Further, a forensic accountant may identify where an additional expert in another field may be necessary to strengthen your case. For example, in an embezzlement case, it may be necessary to get a computer forensic expert involved to help prove the suspect was the individual behind the keyboard when the funds were transferred.

Provide records

To be a credible witness, the forensic accountant will need to have all the relevant evidence, including evidence that may contradict your story. They can better prepare for what is coming to prevent being blindsided during deposition or trial testimony. They need to be able to scrutinize the details while maintaining the big-picture perspective.

Discuss the expected end product

Do you need a full Federal Rule 26 report, or will just a deck of schedules be sufficient? This is typically dictated by the court of jurisdiction, but where the courts don’t require a written report, you may still want one to encourage early settlement. The expert should be familiar with typical court rules about what is necessary in their reports.

Consult when a challenge is brought

When a Daubert, Frye or local state court case challenge is brought against the expert, include the expert in defending against the challenge. The expert may be able to provide you with information useful in their defense.

Communicate regarding deadlines

The more time the forensic accountant has to prepare, the better work product you will receive. Not only does the expert need to understand the financial situation for your case, but they also need to simplify the explanation of their opinions, which takes time.

Ensure your forensic accountant has credibility

One of the first and easiest lines of attack on an expert is the number of hours invested in the case. Where the forensic accountant’s firm has, for example, a hundred hours on the case and the testifying expert has only five hours, the opposing side is going to attack. The expert needs to have hands-on experience with the evidence that affects their opinions.

Ask for a budget after documents are provided

All too often, a litigator gives a thumbnail sketch of the case at hand and then requests a budget from the forensic accountant. Although an experienced forensic accountant can usually come up with a rough range, you will be much better served if the expert has an opportunity to see the documents before providing a budget.

How Wipfli can help

From pre-litigation strategy to expert witness testimony at trial, our experienced team can help. Learn more on our litigation services web page

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Patrick M. DeLangis, CPA, MAFF, CFE, CFF, CVA, EnCE
Senior Manager
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