Forensic accountants can provide litigation support in a variety of cases, including breach of contract, partner and shareholder disputes, loss of profit and damage, divorce and family law, white collar fraud investigations, bankruptcy and insolvency, estate litigation, and breach of fiduciary duty.
Every litigation case involves intricate layers, and attorneys can often build a stronger case when they use the services of a capable forensic accounting team. Litigations support services of forensic accountants can be classified into four broad phases:
The forensic accountant can assist in the discovery and case development stages, and help define the accurate financial framework of the case. They can also evaluate the quality of financial data and documents and identify the relevant figures.
The forensic accounting expert can conduct interviews to help in the meticulous planning and execution of the data collection for the case, and carry out background checks on entities and individuals relevant to the case.
Data Gathering and Analytics
Forensic accountants can collect the required data and marshal critical analytical tasks with an aim to either challenge or support the legal theories being presented in the case. They could also assist in settlement negotiations, conferences, and court hearings.
Reporting and Trial Support
The forensics team can aggregate all their conclusions related to the case, and submit an expert report to support the client’s case. In some cases, the attorney may also require the forensic team to critique the expert report presented by the opposing side. They may also testify during deposition or trial, if necessary.
Expanded Role of the Forensic Accountant in Litigation Tasks
Wherever required, the forensic account can perform a wider role related to each of the litigation support tasks.
For instance, when during the discovery period, the forensic accountant may work together with the lawyer to determine the relevant data universe that would be necessary for that particular engagement.
The forensic accounting team may also continuously analyze, interpret and evaluate the documents that may be obtained from the opposing party in order to verify their reliability and relevance.
In the phase of data gathering and analytics, the forensic accounting expert would investigate all the financial documents received, carry out research, and apply advanced forensic techniques and tools (such as benchmarking, trending and financial ratio analysis).
Based on the requirements of the case, the forensics team may also deploy digital analytics along with data mining techniques to test for potential anomalies in the data. They could do this my evaluating case-specific digital patterns and other digital characteristics.
Testifying in the Court
Experienced forensic accountants are equipped to deal with court proceedings effectively. In many cases, forensic accounting team members may have to participate in these proceedings and may be called to explain their evidence and testify before a judge and jury.
One of the core skills of forensic accountants is to present and provide evidence in a way that it becomes accessible to a larger audience. The jury and the judge are not likely to have specialized accounting expertise, and therefore the forensic team must be able to present the evidence in layman’s terms.
Helping Build a Robust Case
When litigation attorneys are in a position to present hard data in cogent and quantifiable terms, they are often able to achieve tremendous leverage in the courtroom or at the negotiating table.
When the case is substantiated by impregnable facts and figures, it will usually be received very favorably in the court. Therefore, an experienced forensic accountant can deliver strong support to the attorney in the litigation arena by helping them effectively present or defend the client’s case.