How do you choose a forensic accountant? Many people think that one forensic accountant is the same as any other – some think that the more you pay the better service you will get. As with all other professional services this is of course very far from the truth, as there are many different forensic accountants on the market, all with vastly different experience and expertise. It does pay dividends to find one that has the particular skills that your case needs.
You might require an expert accountant to understand and present a particularly complex piece of business or accounting activity. You might want a financial investigator to delve into complex and interlinked potentially fraudulent transactions. You might want a minority shareholding in your family company valued or you might want an independent critique of a financial statement prepared for a white collar criminal case.
Choosing the wrong forensic accountant would be like asking a plumber to carry out an electrical installation. Just because they are both tradesmen does not mean they carry out similar jobs. This obvious point can be carried further – a plumber will re-plaster an area of wall where he has been carrying out some pipework. He will carry out a neat job undertaking this other “trade” in order to finish off his own speciality work. However, you would not ask him to re-plaster your whole house – he could not do it as well or as efficiently as a full time plasterer!
Many forensic accountants are appointed by lawyers. Here the accountant may be chosen for the larger firm that he represents. However, even here care must be taken – all practitioners within an accounting firm or specialist forensic accounting practice do not possess the same skills. When choosing a forensic accountant, the individual expert must be considered apart from the overall expertise of his firm because, if it comes down to a court appearance, it is the expert that will appear in the witness box.
So what should you be looking out for when choosing your forensic accountant?
As discussed above, the particular experience and skills must match the needs of your case. The areas where you might need forensic assistance are numerous, and you should check that your chosen expert regularly undertakes similar cases successfully. These might include business valuation, estimating loss of profits, checking tax assessments, investigating fraud, considering professional accountant’s negligence, defending white collar crime cases and confiscations. In addition there are many, very specialised circumstances where you might want particular industry experience, such as experience valuing a construction business. Another example would be determining negligence of a lawyer’s practice in terms of fulfilling its accounting responsibilities for the Law Society.
A forensic accountant’s work will often result in giving evidence as an expert witness at a trial. An expert accounting witness must be credible – so that weight can be given to his opinion in court. He will be asked questions by opposing counsel that are designed to reveal any flaws in his abilities that would give rise to doubt over the credibility of his expert evidence. Of course relevant experience in the particular subject area is important, but also being a practitioner in a certain area of accountancy and not just a full time expert witness is also important. Giving evidence in white collar crime cases on behalf of the defence is much more credible to the court if the expert witness is also a fraud investigator as well.
As well as relevant experience, training and qualifications provide substantial force to an expert’s credibility. The expert accountant will be a Fellow of his relevant accounting institute, likely educated to post graduate levels at university and be a member of relevant professional bodies and forums. Examples of his writing skills and expertise in the subject areas he specialises in will be evidenced in articles in the press and journals, and even in books published on the subject area.
An important aspect of suitability, if a forensic accountant is to effectively give evidence in the witness box, is whether or not he has been in this position before. Experience in this area is important. But this is an area where caution is needed. Some forensic accountants are seldom called to give evidence – for example if they work on very large criminal frauds where the findings of the prosecution and defence are often argued out of court until some level of agreement is reached. However, most good forensic accountants will be able to demonstrate some competence giving oral evidence in court.
Not all forensic accountants cost the same! If you choose a forensic accountant from one of the larger accountancy practices you will be employing somebody that might cost you in the region of £500 or more per hour. A lot of the work will be delegated to more junior staff and so this rate might fall quite considerably overall. It is still expensive, but your work will be backed by the brand and quality assurances that large firms can give.
If you choose a forensic accountant from a small firm of accountants you might obtain services at £100 per hour or even less. Contained within these two price ranges are hundreds of different forensic accountants, some good ones charging very little and some very poor ones charging a lot. You may have a budget that will constrain your choice, but as far as possible the costs should be the last consideration. It is most important that you choose an expert accountant to carry out your forensic accounting work that is suitable for your case. He or she must:
1. Be experienced and comfortable dealing with the various aspects of your case – this means that they will not take on your case until they have thoroughly familiarised themselves with all aspects of it, and have ascertained that they are acting well within their expertise.
2. Have a curriculum vitae that will impress the reader – this means that work experience, qualifications and professional interest all indicate a high level of competence in the relevant areas.
3. Whether from a large or a small firm, or a specialised niche practitioner – the forensic accountant should appear highly professional in their approach. Costs will reflect the business infrastructure they utilise but in all cases will be higher than the general costs of accountants – owing to the very specialised nature of the work.
4. Finally – and for some most importantly – is the expert someone you can work closely with? If you are employing the forensic accountant for your own dispute or problem you will be working closely and airing your personal issues. It helps if your chosen forensic accountant is approachable and tactful. Even if you are employing an expert on behalf of your client or your company – you must still work closely with them and it helps if you can get on well – working as a team.