January/February 2006

The role of forensic accountants has grown enormously in recent years.  Not only do they play a major role in a wide variety of civil matters including insurance and contractual disputes; they can also become involved in tracking down terrorist funding sources, helping shareholder and government investigators uncover major corporate accounting scandals and assist in following the financial trail of suspected criminals.

In fact, once these trials begin, forensic accountants will present their findings through expert reports and testimony on the witness stand.  They are also there to help guide the lawyer throughout the discovery phase and the cross examination of opposing accounting experts at the trial itself.  If you find yourself in need of this type of expert, how best do you go about selecting the one that is best for your particular case?

“There are numerous factors that need to be considered,” said Daniel Markowicz, partner with MD&D’s Los Angeles office.  “The forensic specialist can be retained through word-of-mouth referrals, through existing relationships with the law firm or its partners or through various internet search engines using certain key words. Lawyers can also seek out potential experts through professional association or membership directories.  In some instances, lawyers are impressed with an opposing witness and want that forensic accountant on their side on the next case.”

When looking for an expert to assist you in a legal matter, be sure to check their areas of expertise.  For example, do you need someone with experience in the energy and utility fields or products liability and recall?  Is the expert needed to determine the value of stocks or compute the lost profits of your client?  These are all questions to keep in mind when interviewing your forensic accountant.

“When I’m contacted by someone I’ve never worked with before, the first thing I do is send them my CV.  It lists my credentials and my general experience in various industries, which is very important.  It also lists where I have provided deposition or courtroom testimony,” Markowicz said. “Most lawyers will also search for published opinions in previous cases that site the findings of the potential witness.”

Equally important are the expert’s presentation skills, potential approaches to the case and depth of supporting resources.  An experienced forensic accountant should be able to quickly gauge the general strengths and weaknesses of both sides after a cursory review of the details. He or she can also develop different damage scenarios that may pave the way for settlement discussions.

“From a CPA’s perspective, an expert witness can certainly help make or break the damages portion of the case,” Markowicz said.  “The CPA designation and other AICPA credentials such as CFE or CVA can carry additional weight and respect with juries.”