Criminal Investigation
The role of the forensic accountant in criminal investigations
Forensic accountants are commonly employed by both the defence and the prosecution in white collar crime cases. This is often in a complex fraud when the financial and business issues need to be unpicked and explained succinctly to the court.
Sometimes a forensic accountant will be asked by the defence to inspect a Prosecutor’s Section 16 Statement prepared under the Proceeds of Crime Act 2002 for confiscation proceedings. In this case it is up to the defendant to disprove many of the Crown’s often sweeping assumptions. This can involve the valuation of a business, demonstrating legitimate income or disproving allegations of “hidden assets” by the expert. In all cases an written report will be prepared by the forensic accountant who may also be called upon to provide oral evidence in court if appropriate. Therefore, the criminal or fraud expert must not only be a competent accountant and business adviser and be able to inform the court with a well written, clear and concise report, but also be able to withstand cross examination by prosecution counsel if needed.
Regulatory Assistance
In addition to the defence, often the authorities will use the services of a competent forensic accountant also. This may be to assist them with their fraud investigation, by unravelling the complex trails of money movement or identifying unusual business practices. In exactly the same way as when assisting the defence, the forensic accountant must be independant, impartial and demonstrate the highest levels of integrity in their work.
Expert forensic accountants will assist the police and economic crime units with their cases, by reviewing and analysing papers and occasionaly sitting in on interviews – particularly where professionals are being questioned. Also expert accountants will assist other regulators in their work:
Serious Fraud Office
The SFO often employs teams of accountants from a number of different leading accountancy firms. Their usual remit will be to reconstruct accounting records from prime documents such as invoices and receipts, as a result of accounting summaries having been destroyed or they have “gone missing”.
Companies Investigation Branch
CIB is a department within the Insolvency Service, an arm of the Department for Business Innovation and Skills (formerly the DTI or BERR). They are tasked with policing corporate entities of which there are several million in the UK. Not all are set up to opperate in the public interest, and many scams and frauds are closed down and their directors disqualified and prosecuted. CIB employs its own investigators together with a number of external accredited persons who are able to conduct an enquiry under Sections 447 and 453 of the Companies Act 1985.
Other fraud regulatory agencies
Many other fraud regulators will employ the services of independant forensic accountants from time to time. These include the Financial Services Authority, The Serious and Organised Crime Agency, The Association of British Insurers, Trading Standards, The Office of Fair Trading and many others.