{"id":3867,"date":"2019-10-16T05:56:44","date_gmt":"2019-10-16T05:56:44","guid":{"rendered":"https:\/\/nmsconsulting.com\/?p=3867"},"modified":"2022-02-07T00:26:48","modified_gmt":"2022-02-07T00:26:48","slug":"forensic-accountants-cpas-as-expert-witnesses","status":"publish","type":"post","link":"https:\/\/nmsconsulting.com\/3867\/forensic-accountants-cpas-as-investigators-and-expert-witnesses\/","title":{"rendered":"Forensic Accountants: CPAs As Investigators and Expert Witnesses"},"content":{"rendered":"<!--themify_builder_content-->\n<div id=\"themify_builder_content-3867\" data-postid=\"3867\" class=\"themify_builder_content themify_builder_content-3867 themify_builder tf_clear\">\n                    <div  data-lazy=\"1\" class=\"module_row themify_builder_row tb_f545869 tb_first tf_w\">\n                        <div class=\"row_inner col_align_top tb_col_count_1 tf_box tf_rel\">\n                        <div  data-lazy=\"1\" class=\"module_column tb-column col-full tb_2e399ba first\">\n                    <!-- module image -->\n<div  class=\"module module-image tb_11fc1ec image-center   tf_mw\" data-lazy=\"1\">\n        <div class=\"image-wrap tf_rel tf_mw\">\n            <img decoding=\"async\" src=\"http:\/\/nmsconsulting.com\/wp-content\/uploads\/2019\/10\/Forensic-Accounting-1.jpg\" width=\"900\" height=\"500\" title=\"Forensic Accountants: CPAs As Investigators and Expert Witnesses\" alt=\"Forensic Accountants: CPAs As Investigators and Expert Witnesses\">    \n        <\/div>\n    <!-- \/image-wrap -->\n    \n        <\/div>\n<!-- \/module image -->        <\/div>\n                        <\/div>\n        <\/div>\n                        <div  data-lazy=\"1\" class=\"module_row themify_builder_row tb_fe137a8 tf_w\">\n                        <div class=\"row_inner col_align_top tb_col_count_1 tf_box tf_rel\">\n                        <div  data-lazy=\"1\" class=\"module_column tb-column col-full tb_41f7455 first\">\n                    <!-- module text -->\n<div  class=\"module module-text tb_394889d  repeat \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <p><strong>By David K. Golbahar<\/strong><\/p>    <\/div>\n<\/div>\n<!-- \/module text --><!-- module text -->\n<div  class=\"module module-text tb_45cf53f  repeat \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <h2><span class=\"s1\">Forensic accountants are involved with complex commercial litigation matters including; fraud, breach of contract, product liability, wrongful competition, intellectual property infringement, royalty disputes, and construction claims.<\/span><\/h2>    <\/div>\n<\/div>\n<!-- \/module text -->        <\/div>\n                        <\/div>\n        <\/div>\n                        <div  data-lazy=\"1\" class=\"module_row themify_builder_row tb_56fabd5 tf_w\">\n                        <div class=\"row_inner col_align_top tb_col_count_1 tf_box tf_rel\">\n                        <div  data-lazy=\"1\" class=\"module_column tb-column col-full tb_931dd21 first\">\n                    <!-- module text -->\n<div  class=\"module module-text tb_4902ef1  repeat \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <p class=\"p1\"><span class=\"s1\">People associate forensics with crime scene investigation shows, but this is not the case with accountants. In the financial world, forensic accountants investigate matters, but not in a laboratory or at a bloody crime scene. Rather, forensic accountants are specialists across different fields of accounting and law. They use a blend of education and investigative experience to discover facts, investigate complex financial issues, and prepare reliable analysis that can ultimately be used in trials or mediations. Forensic accountants are hired by attorneys, company executives, insurers, and families. The work performed includes investigative accounting, calculation of economic damages, and preparing business valuations. Many serve as experts to courts and as an independent party during depositions, mediation, and trials.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">There is a wide variety of situations where a forensic accountant would be useful. Each party in litigation can use accountants, or they may jointly elect one for both parties as an independent expert.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Partnership\/Shareholder Disputes:<\/b>\u00a0Most commonly, distributions are analyzed, but in certain situations, tracing and quantifying compensation and benefits to the parties are also reviewed. Forensic accountants may step in to provide a clear view of a company\u2019s finances in a dispute.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Commercial Damages:<\/b>\u00a0Forensic accountants are involved with complex commercial litigation matters including; fraud, breach of contract, product liability, wrongful competition, intellectual property infringement, royalty disputes, and construction claims.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Commercial Insurance Claims:<\/b>\u00a0When a disaster or other incident arises where an accountant is necessary for insurance purposes, forensic accountants assist adjusters and the insured in preparing figures for a claim. Some claims that require analysis include; business interruption, property losses, and employee fraud\/dishonesty claims.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Fraud Investigations:<\/b>\u00a0Forensic accountants assist in investigations for white-collar crimes. This work includes tracing funds, asset identification, and document review. Accountants work with both attorneys and law enforcement to investigate suspected fraud, misrepresentation, and money laundering. Internal controls can also be investigated and implemented by forensic accountants.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Complex Personal Injury Issues:<\/b>\u00a0Experts in these types of cases assist with complex damage claims resulting from a loss of earnings or household services. Other cases include wrongful death, wrongful termination and malpractice.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><b>Family Law:<\/b>\u00a0During divorces, forensic accountants are called on to assist with preparing income and expense declarations, asset division, and business valuations.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">When hiring, timing is everything for forensic investigators. Generally, earlier is better. Document gathering and organization can be time consuming. Forensic accountants can help save time and resources by identifying areas for discovery and documents for review. In court cases, each state and the federal government have procedural rules for appointing experts. Engaging a forensic accountant as early as possible is beneficial for discovery, procedural matters, and overall analysis.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">In matrimonial cases, attorneys or a spouse may hire a forensic accountant to assist with preparing required court documents, such as an income and expense declaration. Their involvement and examination can lead to a more equitable settlement and uncover potential hidden assets or misconduct.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">In situations where resources are tight, there are ways to save before hiring an expert or a litigation support specialist. For forensic accountants, organization is extremely important. Several hours and even days may be spent organizing records and documents before they are analyzed. Indexes, folders, and other sorting methods save time and efforts for all parties involved. Organization upfront is critical. Authenticity of documents is also an important aspect of investigations. Modified documents and mismatching records\/figures lead to additional time and resources spent to tie and match them.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Each case and matter require different types of forensic experts, so it is vital that an individual inquire about the areas of expertise of the forensic accountant they plan on engaging. Certifications may help identify areas of additional expertise, such as Certified in Financial Forensics (CFF) or Certified Fraud Examiner (CFE). Always select an expert with strong foundational accounting, analysis, and communication skills. The analysis and determinations of a forensic accountant are important, but as experts in court, they must be also able to communicate and present their findings to a jury, judge, or other parties.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Costs vary per each type of engagement, case, or investigation. Forensic accountants are required to stay independent and exercise a duty of care in their work. As such, payments generally cannot be attributed to the results of their work, like attorneys working on a contingency basis. Fees typically include a retainer to begin work, and then hourly billing, like most attorneys. Hourly rates vary based on experience, area of law, and region of the case. Because forensic accounting is a complex field, hire professionals that are dynamic and possess the right qualifications. Hiring a quality forensic accountant will make the difference.<\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">Each situation or case is different, but most require common steps. The general steps forensic accountants perform for engagements include:<\/span><\/p>\n<ol class=\"ol1\">\n<li class=\"li3\"><span class=\"s2\">Gain an understanding of the facts, issues, and parties at hand.<\/span><\/li>\n<li class=\"li3\"><span class=\"s2\">Perform a conflict check.<\/span><\/li>\n<li class=\"li3\"><span class=\"s2\">Review initial documents and take a cursory look at the available information.<\/span><\/li>\n<li class=\"li3\"><span class=\"s2\">Outline and develop an investigation or engagement plan, setting objectives and reviewing methodologies to be utilized in the plan.<\/span><\/li>\n<li class=\"li3\"><span class=\"s2\">Obtain necessary documents\/evidence for the case. Examples include bank statements, economic data, court filings, depositions, and other documents useful to determining facts and the flow of events.<\/span><\/li>\n<li class=\"li3\"><span class=\"s2\">Carry out investigation or additional research. This includes tracing assets and interviewing parties.<\/span><\/li>\n<li class=\"li3\"><span class=\"s2\">Prepare an analysis. Calculations may be performed, including sensitivity analyses, regressions, economic damages, or other agreed upon assessment.<\/span><\/li>\n<li class=\"li3\"><span class=\"s2\">Drafting a final report.<\/span><\/li>\n<\/ol>\n<p class=\"p5\"><span class=\"s1\">The use of forensic accountants early and throughout complicated issues adds value for attorneys and executives looking for insight and analysis in complicated matters. Trust your CPA!\u00a0<\/span><\/p>    <\/div>\n<\/div>\n<!-- \/module text -->        <\/div>\n                        <\/div>\n        <\/div>\n                        <div  data-lazy=\"1\" class=\"module_row themify_builder_row tb_4545728 tf_w\">\n                        <div class=\"row_inner col_align_top tb_col_count_1 tf_box tf_rel\">\n                        <div  data-lazy=\"1\" class=\"module_column tb-column col-full tb_14f3d22 first\">\n                    <!-- module text -->\n<div  class=\"module module-text tb_4f06113  repeat \" data-lazy=\"1\">\n        <div  class=\"tb_text_wrap\">\n        <p class=\"p1\"><strong><span class=\"s1\">About the Author<\/span><\/strong><\/p>\n<p class=\"p1\"><strong><span class=\"s1\">David K. Golbahar, CPA\/CFF, CGMA is a forensic accountant and financial consultant. He is an expert witness for civil and criminal accounting matters. David is an active board member of the Westside Bar Association. <\/span><\/strong><\/p>    <\/div>\n<\/div>\n<!-- \/module text -->        <\/div>\n                        <\/div>\n        <\/div>\n        <\/div>\n<!--\/themify_builder_content-->","protected":false},"excerpt":{"rendered":"<p>Forensic accountants are hired by attorneys, company executives, insurers, and families. The work performed includes investigative accounting, calculation of economic damages, and preparing business valuations. Many serve as experts to courts and as an independent party during depositions, mediation, and trials.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[68,22,69],"tags":[111,80,81,113,72,110,73,75,85,87,112,77,78],"class_list":["post-3867","post","type-post","status-publish","format-standard","hentry","category-corp-ad","category-insights","category-mgmt-con","tag-corporate-advisory","tag-cg","tag-ecb","tag-forensic-accounting","tag-ims","tag-management-consulting","tag-ma","tag-pe","tag-rm","tag-ssf","tag-tax-advisory","tag-tre","tag-vfa","has-post-title","has-post-date","has-post-category","has-post-tag","has-post-comment","has-post-author",""],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Forensic Accountants: CPAs As Investigators and Expert Witnesses<\/title>\n<meta name=\"description\" content=\"Forensic accountants are hired by attorneys, company executives, insurers, and families. 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