When I tell people that I’m a forensic accountant, they sometimes think of Christian Wolff, Ben Affleck’s character in the movie The Accountant. While it’s true that a forensic accountant can use their skills to investigate a company for potential embezzlement, the majority of cases they help attorneys with are far less glamorous.
A forensic accountant is frequently a Certified Public Accountant, but most CPAs are not forensic accountants. Typically, most accountants prepare tax returns, perform bookkeeping services, provide assurance services (audit, review, compilation, etc.), or consult in these areas.
To borrow a phrase from another Hollywood character, forensic accountants have a “very particular set of skills” that make the services they provide unique. A forensic accountant can assist in calculating economic damages, valuing a business as part of a contentious divorce, or investigate theft by an employee and then relay those findings to the trier of fact. A forensic accountant may also hold additional certifications showing expertise in fraud or business valuation.
Working with a forensic accountant can add significant value to a case, but it can also result in a waste of money if all parties are not communicating properly.
Here are five tips for attorneys to ensure a more successful outcome when working with a forensic accountant.
I can’t tell you the number of times that an attorney has told me, “I wish I had hired you sooner.”
Hiring a forensic accountant early in the process allows them more time to work with discovery, strategy and the rebuttal of opposing experts. The more time you can provide your forensic accountant, the more time they have to analyze and conclude on the financial aspects of your case. In addition, as part of their analysis they may uncover other items that need to be analyzed, which may take extra time.
Finally, if you hire an expert early on, you have a better chance that the expert is not going to be conflicted out of the case or run into a scheduling conflict with another matter.
It’s important that your expert knows what type of report you will need up front. Are you going to need a full report, or will schedules be sufficient? Are you anticipating going to mediation first, or do you assume this matter will definitely go to trial? Is there anything unique about the jurisdiction that the expert should know?
What are the deadlines that the expert needs to be aware of? When does discovery close? When is their report due? When are the trial dates? By informing the expert of the calendar up front, they can properly map out a work schedule to ensure that the work is done in a timely fashion. Telling your expert on Wednesday afternoon that you forgot to tell them the report is due by end of day Friday can result in mistakes that impact your case.
As an expert, I like to have all relevant evidence from my client, even if they do not believe it’s helpful to their case. This allows me to examine all the documents myself and identify additional questions as part of my analysis. In addition, if I have all the documents, I am better prepared for what might be thrown my way in a deposition or cross-examination at trial.
It's crucial to explain to your client that the actual outcome of the expert’s report is unknown when they are hired. In addition, an expert may disagree with the client’s assessments and/or opinions. For example, a client going through a divorce may believe their business is worth $5M, but the expert’s report shows a value of $7M. An expert has to consider all the relevant facts and come to an opinion that is supportable, which may not be the exact opinion your client wants.
Do you need the help of a forensic accountant for your case? Contact us here or call 800.899.4623.