5 Ways an Expert Witness in Accounting Can Bolster Your Fraud Case

Since the recent economic downturn, individuals as well as businesses of all sizes have been facing immense financial pressures. So, it’s no wonder that the number of fraudulent financial activities and schemes is on the rise. An estimated 20 percent of U.S. businesses are subjected to fraud incidents each year, translating to a loss of over $600 billion.

The overall financial climate, coupled with advancements in technology over the past few years have translated to even more opportunities for computer fraudsters to wreak financial havoc. Despite efforts to strengthen security systems, computer fraud is a huge problem that still plagues corporate America.

When companies need to measure and recover damages caused by such fraudulent activity, forensic accountants often step in to assist in the investigation, measure the damages and provide litigation support to inside and outside counsel. During legal proceedings, a forensic accounting expert can help solidify a fraud case by analyzing the evidence and providing detailed findings or even help to prevent fraud from happening in the first place. For example, a forensic accountant can explain the complexities of how a particular computer program could have been manipulated to allow fraud to pass through a company’s system.

An effective forensic accountant is more than a “number cruncher” who specializes in criminal cases. It’s critical to select an analytically savvy, clear communicating expert witness to serve on the stand, in order to strengthen your fraud case. These experts are typically called to testify and apply specialized knowledge to the evidence presented to the jury, as well as offer an opinion or render a conclusion. Additionally, a non-testifying expert’s opinion may be used from start to finish of a case. Large-scale, complex fraud cases often require such witnesses to summarize extensive evidence.

Here are five ways a forensic accounting expert witness can help bolster a fraud case:

  1. Provide counsel with a case evaluation. It’s important for the forensic accounting expert to have a deep knowledge and understanding of all the complexities involved. This expert will start by gathering and analyzing the necessary records, such as bank and credit statements, journals, ledgers, databases, e-mails and memos — anything that will offer a bigger picture of the financial situation.
  2. Assist in the overall planning strategy for the case. This incorporates researching, obtaining, examining and evaluating evidence. Forensic accountants must complete a thorough review of all documents, transactions and other financial records to uncover details of any embezzlement, and estimate the losses incurred as a result. Looking beyond the numbers and anticipating criminal actions is also is vital to preparing a strategy for a strong case testimony.
  3. Interview witnesses and explain developments in the case. Interviews are geared to answer basic questions: who, what, where, when, how and why. It’s also important for the interviewer to be observant to subtle hints and clues during this phase that may lead them to evidence or the perpetrator.
  4. Help counsel navigate unexpected changes during trial, and conduct investigations. Experienced forensic accounting experts conduct an exhaustive internal investigation by utilizing an understanding of economic theories, business information, financial reporting systems, accounting and auditing standards and procedures, as well as data management and electronic discovery.
  5. Assist in pre-trial motions, pleadings and responses. Ultimately, forensic accountants must present their detailed findings of what the investigation recovered in a written report. This report may include graphs, charts, spreadsheets and other methods of explaining the case, and supplies the basis for pre-trial settlement negotiations and in-court testimony if the case does not settle. The forensic accountant’s report is critical to the successful resolution of the legal dispute.

As the economy slowly recovers, financial fraud will likely continue on the upswing, but working closely with a highly skilled forensic accounting experts who understand the litigation process as well as the technologies involved can help to stop white collar crime dead in its tracks and recover losses.

If you have any questions around financial fraud or how to prepare for it, fill in the form below and our experts will be in touch.

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