Frequently Asked Questions
The following are some frequently asked questions attorneys have regarding forensic accountants and about business valuations:
Do I need a forensic accountant or valuations expert in my case?
Certified public accountants who provide litigation support services are often referred to as “forensic accountants”. They normally are used as experts in accounting related matters that are necessary in support of business or family law litigation matters. What makes forensic accountants different is that they are experienced in using multiple methods of financial and economic analysis to provide appropriate and objective conclusions on complex financial issues, often when the facts or data are incomplete. If you are representing a client in a matter that requires financial evaluation, such as a determination of economic damages, tracing funds that have been diverted, personal injury and other matters involving financial issues, then a forensic accountant can be a valuable asset to your case. If a business valuation is needed as a means to measure damages or for other purposes in litigation, in divorce matters, or regarding the purchase or sale of a business (or business interest), then a business valuator can assist in the process.
Forensic accountants often have experience in serving as an expert witness. When explaining complex financial analyses to the trier of fact, it is imperative that your expert witness is skilled at clearly and accurately explaining the details in a manner that can be easily understood. Expert witnesses also must be objective and utilize generally acceptable practices in order for their testimony to be credible and admissible.
How can a forensic accountant help my case?
Forensic accountants can assist throughout the litigation process. During discovery and fact-finding, they can aid your investigation by advising you on what documentation you should obtain. They can also help you identify the accounting and valuation questions pertinent to your case, which includes their assistance with formulating requests for production, interrogatories, and questions to be asked of witnesses at deposition and trial. Thus, this process can help you streamline your trial strategies and the focus of your case. The earlier you hire your forensic accountant in the litigation process, the more assistance and support you will likely receive.
What qualities should I look for in selecting a forensic accountant?
There are a number of qualities you should look for when selecting a forensic accountant to work with on your case. The following summarizes some of the factors to consider in selecting a forensic accountant or valuation consultant on a legal matter:
- Experience: How many years of practical accounting experience and expert consulting experience do they have?
- Education: Are they licensed as a Certified Public Accountant? Do they have any professional designations? Do they stay current with continuing education courses, books and publications?
- Ability to communicate: Will they be able to clearly express complex accounting theories and explain financial issues in a manner a jury can understand? Have they given presentations to attorneys and other professionals?
- Impartiality: Will they be objective? Have they served as a consultant both to plaintiffs and the defense in litigation matters?
- Credibility: Do they appear to be honest and believable? How do you think they will be perceived by a judge or jury?
- Support: In the preparation of your case for trial, how much advice and support do you think they will offer? Do they appear to be committed to your case without being biased?
- Confidentiality: Do they understand the importance of the attorney-client relationship? Do they have experience with handling highly sensitive documents?