A day in the life of a Forensic Accountant

Forensic accountants are qualified experienced accountants who are Experts in analytical investigation with the ability to explain complex accountancy, taxation and related matters simply to a Court or Tribunal.   A good forensic accountant will have the level of knowledge of their own discipline that allows them to speak with authority on every aspect relevant to a particular case with confidence, clarity and authority based on personal up to date experience.  In written or oral evidence they must demonstrate a good knowledge of the relevant procedural rules (CPR 35, Crim. PR 33, Family Procedure, etc) and produce their opinion impartiality to assist the Court whether acting as a Party expert or a single Joint expert.  This is a minimum standard for an accountant to be accredited as fit to give evidence. 

Established forensic accountants have work referred to them by solicitors, Judges, institutions and others based on their reputation for earlier case work.  It is difficult to break into this stream of work and usually low value cases as a loss leader or working with others as assistants in the larger accountancy and boutique practices is the best way to get live case experience as well as courses and training.  There are wannabe experts everywhere doing investigations into fraud, valuations for divorces, tax enquiries, Local Authority teams or Court Martial work but without training in giving expert evidence they are not attractive as part of a litigation team as an expert. 

Challenges face established experts in the current climate due to decreased margins, reduced rates and cuts in the Legal Aid LSC budget although international work has not been affected by this cost cutting.  The need to use more flexible but totally confidential staff or contractors and the greater involvement of forensic computer teams affect data gathering, evaluation and management.  It is no longer enough to be a good accountant with great analytical skills and common sense who is technically up to date in CPD with relevant experience to a case referral but now the forensic accountant must be prepared to work overnight, at weekends, with less staff and for less than half normal rates without being paid for several months.   

The new system at the LSC is problematic with a very slow approval of fee quotes, giving shorter lead times on assignments, which can only start after the LSC letter is issued, leading directly to staff overtime and tight Court deadlines with poorer quality data as there is less time to make third party enquiries.  Frequently approved time is so reduced on criminal quotes that the pool of suitable accountants willing to undertake the work is substantially reduced. 

Evert practicing forensic accountant needs to maintain a balance in their practice between defence and prosecution work as an expert witness, expert determinations, single joint instructions and actually undertaking accountancy and tax assignments and training to keep up to date with current practice and accounting standards.  Forensic accountants are being driven towards specific types of instructions and in the future it would seem the boutique forms combining different experts under one roof with synergies in practice costs would be the best solution as a “club” of qualified experts rather like a Barrister’s chambers.   

Single independent experts do have the advantage of rarely having conflicts that are rife when part of a large accountancy practice but they carry a greater risk of being sued after Jones v Kaney and higher individual costs such as increased PII cover.  Occasional experts without proper Expert Witness training run the highest risks of all and put the reputation of good experts in jeopardy, it should be remembered that it is a privilege to give opinion evidence that should not be abused. 

Forensic accountancy practice is changing under the impact of reduced LSC budgets, the rise of mediation and increased reliance on IT and computer forensic techniques.  It is still a very useful role and although forensic accountants can be seen as an unnecessary cost in a case there is no doubt that they add value especially in the early stages as part of a litigation team and at trial in  explaining complex issues for the Courts and tribunals - if utilised properly.  Don’t forget that it took an accountant to catch Al Capone!