What a Lawyer Should Look for in a Forensic Accounting Expert Witness (Part 2 of 3)

Natalelie Burchfi

In the first part of this series, reasons to consider a forensic accounting expert witness and the Federal Rules of Evidence for expert witnesses were reviewed.  An expert witness is a witness who, by virtue of education, training, skill, or experience, is believed to have knowledge in a particular subject beyond that of the average person, sufficient so that others may officially (and legally) rely upon the witness’s specialized (scientific, technical or other) opinion about an evidence or fact issue within the scope of their expertise.  For the second part of this series, the background specifics of potential witnesses are reviewed, and the differences between a testifying and non-testifying expert are explained.

Which Accounting Specialist Suits the Needs of the Case?

How forensic accounting expert witnesses are selected for a legal team will vary by the focus of the case.  Some specialists within the accounting field cast of characters may include a standard accountant, a CPA, a fraud examiner, an auditor and an accounting IT specialist, among others.  One of these specialists may be needed to: speak as to what the standard job duties and responsibilities of an accounting position are; provide an understanding of Generally Accepted Accounting Principles (GAAP) or other definitions in the field; give documented past case evidence of accounting fraud; explain how an inside or outside auditor may initially discover potential fraud; or give examples and explanations of how accounting software and other IT tools may be used to commit fraud.

To Testify or Not Testify: That is the Question

Once the specialty of the accountant is decided upon, the legal team needs to think about how they will use their expert witness(es).  The two primary types of experts are non-testifying and testifying.  The differences are critical in how the expert is utilized and how the court does or does not provide protection.  A non-testifying expert’s opinions are considered work product, typically protected by attorney/client privilege, and used from start to finish of a case.  The preparation of a fraud case may rely in great part on this expert, who may:

  • Provide counsel with an evaluation of the case .
  • Assist in planning strategy.
  • Search, obtain, examine and evaluate evidence.
  • Interview witnesses and potential witnesses.
  • Explain developments in the case as the original theory may become altered by discovered evidence.
  • Assist in pre-trial motions, pleadings and responses.
  • Attend trials and assist counsel in unexpected changes during trial, thereby being able to assist in cross examination of the opposing parties witnesses and alert counsel to inconsistent testimony.
  • Take notes and conduct investigations during the trial.

In contrast, a Testifying expert is not protected by attorney/client privilege and the expert’s identity and most if not all documents used to prepare the testimony may become discoverable.  Opposing counsel would be aware of proposed testifying witnesses and would likely counter with their own witnesses with opposing expert opinions.  These “testifying” experts must satisfy the requirements of Federal Rule of Evidence 702 (first referred to in Part 1), where an expert is a person with “scientific, technical, or other specialized knowledge” who can “assist the trier of fact,” – usually a jury.  A qualified expert may testify “in the form of an opinion or otherwise” if: “(1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.”  So choose wisely, counsel.

Depending upon whether the expert witness is needed to assist behind the scenes of a trial, or to appear center-stage as a testifying expert, there are many skills and special qualities that will aid in reaching a successful outcome to a case.  The final part of this series will look at what these are, and how forensic accounting expert witnesses use these in the courtroom during a trial.

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