Any expert witness is called to court for one reason only: to provide specialized information or opinions to the judge and jury. In the case of accounting expert witnesses, their specialization happens to be accounting, or the art of record-keeping of money. This makes them an important part of any trial dealing with financial irregularity, which usually involves some type of fraud.

Accounting expert witnesses and fraud cases

When cases of fraud are suspected, the logical solution is to study the financial records, identify any falsifications, and trace the missing money or assets. Of course, it is never that simple in many real cases. The perpetrators often work in accounting or finance, which means they can be pretty good at covering their tracks! For this reason, the contribution of good forensic accountants can be invaluable in a courtroom.

However, not all fraud-related forensic accounting takes place in the courtroom. Expert accountants can also be called in at the pre-trial stage. For instance, they are hired by firms who suspect internal fraud or malpractice, but do have the forensic skill to trace the culprit(s). In this case, the expert’s report may also become evidence if the firm decides to file official charges.

Scope of work beyond fraud

There are also cases not directly related to fraud that also require the services of experienced accounting experts. For instance, a lawyer handling a bitter divorce case may want a complete financial profile of the opposing party. This is usually done if either party suspects the other is hiding assets or undervaluing them.

Accounting experts are also part of personal injury and accident cases. Their expertise is useful when it comes to accurate valuation of losses, both actual and potential. For example, a person’s accounts will give a realistic snapshot of average earnings, which is then used to calculate any loss of earnings. In an accident or robbery, a forensic accountant may be called in to study the value of assets.

Basically, the fundamental role of the accounting expert witness is to study the complex, highly technical accounting data, and then present honest, simplified explanations for the judge and jury. These expert opinions can be very influential in deciding the outcome of a case, which makes it important that lawyers find and hire properly qualified accountants.

Qualifications for accounting expert witnesses

The most basic and obvious requirement is that the candidates be certified accountants, with local credentials. After this, courts and lawyers look at the overall experience and qualifications. Membership of a national body such as the Association of Certified Fraud Examiners (ACFE) is a major plus point, as is long-term participation in local accounting associations or organizations.

Other than provable domain knowledge, an ideal expert witness is also able to communicate well, especially within the boundaries of official procedure. In fact, lawyers prefer an expert who has served in earlier trials, simply because this means the person is already used to courtroom procedures and knows what to expect.

Accounting expert witnesses in the dock

Whether in the courtroom or before the trial, an accounting expert witness needs good communication skills. For instance, pre-trial work may involve pouring over thousands of pages of accounting entries, then creating a short report that condenses all that information. During trial, accounting expert witnesses are also expected to be able to handle cross-examination and conflicting reports by an opposing expert.

Education and experience: Sometimes the best way to disarm expert witnesses is to attack their credibility. Before taking the stand, any accounting expert witness should be ready to face some hostile questions about professional qualifications and relevant experience. However, keeping a calm demeanor and staying confident in your expertise does help to defuse this courtroom tactic.

Presentation and attire: Inside the courtroom, the expert witness has to win the confidence and trust of the jury and judge. A major part of this has to do with first impressions, so suitably formal wear is strongly advised.

Interpersonal skills: Accounting experts have to deal with an audience that usually knows next to nothing about the complexities of modern accounting. Good interpersonal and communication skills can make the difference between an accounting expert and an accounting expert witness.

Stick to the facts: Court cases can be pretty adversarial and witnesses often find their opinions and findings under attack. Lawyers also use the cross-examination to try confusing accounting experts and create doubts about their testimony. The best defense is to stay polite and stick to your honest, professional opinion.