Attorneys who use forensic accountants are familiar with the analysis and testimony an expert can provide in matrimonial cases, commercial disputes, lost profits claims, criminal and civil cases, and many other types of litigation.
Typically, financial experts are called on to calculate, analyze and prepare reports, as well as refute the opposing expert’s testimony. Experienced litigators use forensic accountants throughout the development of a case.
The following are five often overlooked areas where a forensic accountant may prove to be invaluable to a successful outcome.
1. Pre-case analysis
Every attorney understands that each case should be judged on its economic merits. Pre-case analysis by a forensic accountant will help determine if the financial outcome will exceed the cost of litigation.
Prior to accepting a case, attorneys should invite their expert to an initial client meeting to review relevant financial evidence and evaluate the merits of the case. By determining the economic feasibility of a case, forensic accountant can help eliminate needless protracted litigation in matters that have little or no financial value.
2. Assistance in preparing the pleading
Financially based cases often require the pleading to contain concepts that are best expressed in precise technical terms. Many times pleadings fail to identify the correct financial concepts and therefore contain vague and incomplete allegations.
Forensic accountants can assist attorneys in making sure the goals of the case and specifics of the allegations are clear.
3. Preparation of production request
Because cases differ by industry, business type, subject matter and number of litigants, unique records are required in every forensic analysis of financial data.
It is essential to the success of a case that the exact data needed is requested by its precise nomenclature. Improper terminology often results in production delays or not receiving the appropriate data.
Additionally, should the opposing counsel object to the production request, the forensic accountant could provide the explanation necessary to sustain the merits of the request.
4. Scripting direct and cross examination
As a result of their investigative work, experts are in an excellent position to prepare questions to be used in their overt testimony. Complex financial data usually confuses the average trier of fact and often results in middle-of-the-road decisions. Forensic accountants know which financial points concisely portray the case.
By determining the salient questions to be asked during direct testimony and using written or graphic presentation aids, forensic accountants script the “story” of the case. Testimony that is simple to understand and avoids overly technical issues will most effectively support your argument.
Conversely, armed with the knowledge of the opposition’s data, forensic accountants can develop question scenarios that will bring out inconsistencies or weaknesses in the opposition’s case.
Perhaps the most overlooked area regarding the proper use of forensic accountants is in the area of mediation. During this dynamic process, a financial expert should evaluate every financial offer, counteroffer or compromise.
Tax implications often need to be considered before arriving at a settlement. Forensic accountants can assist attorneys by clearly explaining to their clients the economic impact of any proposed agreement. Finally, the working of the final settlement should be critiqued to ensure compliance with various financial criteria.