Forensic Accountant Or Expert Accounting Witness?
A forensic accountant may investigate a fraud or a crime, then go to court to present his findings as an independent and impartial expert. He or she will draw upon experience that includes accountancy, business and legal disciplines, while in addition must understand the statutory criminal investigative framework.
It can be difficult to give a single title to such a person. Descriptions of my job title have included forensic accountant, expert witness, expert accountant, fraud expert, fraud investigator or independent expert. In reality, it is a combination of all these.
It Is Not Always About The Court
Much of my work involves investigating a matter and writing a report that might be submitted as part of criminal or civil litigation. The fundamental issue is the application of an independent viewpoint on matters involving numbers or money transactions. The more complicated or confusing the transactions, the more likely my work will be required.
This leads to another aspect of my work, some would say the most important part! This is the examination and collation of all the details in a case involving disputes over money or numbers, and presenting them simply, in such a way that they are understandable to anybody. One of the most important areas of feedback I receive is that I am able to quickly unravel a financial situation, which might date back several years and involve complex transactions between many parties, and clarify the situation.
This is particularly important to somebody who has a financial dispute, and finds themselves facing a claimant who, through ignorance, belligerence or perhaps even greed, is demanding some form of settlement. The victim may understand why he does not owe large sums of money to the claimant, but cannot explain it succinctly. This is why the “expert” must be a good communicator, developing the art of reducing many thousands of pages of information to just a few.
A Simple Forensic Accounting Example
At its simplest, a person’s finances may potentially be explained by two bank accounts, say one current account and one deposit account. By glancing through these, it might be possible for most people to understand that a particular claimant’s demand had already been paid in full a couple of years ago. However, as the numbers of pages of bank statements get longer, perhaps as many more accounts are involved together with credit cards, other investment accounts and cash dealings, the picture (to a non-accountant) can become frighteningly obscure.
A forensic accountant would analyze the bank statements for each account. However, it is how these analyses are summarized and presented that is the expert’s skill.
A more complicated example recently involved an extradition case for a person accused of orchestrating a national disaster during the financial crash in 2008. Being a major oil importer for his country, the oil price crash in 2008 caused his company to fold owing $100 millions. Knowing he was being blamed for an ensuing recession by the authorities, the defendant fled to the UK.
The case was presented very badly by the authorities, with file upon file of documents relating to the government regulated oil industry. My work was able to show the shortcomings of the authorities case, and how the defendant’s company was one of many businesses affected by the global recession and burst credit bubble.
Independent Viewpoint Of Financial Cases
It is important that a forensic accountant’s work is seen as impartial, even if it is being carried out on behalf of one side or the other. There are times when my report has caused the prosecution to drop a case, or the defendant to plead guilty. Whatever happens, a better outcome is being sought, with fairer results flowing from better understanding of the fine points of any case. This is why many civil matters utilize single joint experts. Unfortunately the criminal prosecution system does not seem to like doing the same.