Cameras, action, fast cars and glamour is not the world of the forensic accountant, sadly. That is more the world of shows like Wall Street, The Untouchables or White Collar and is far removed from the paper shuffling and analysis that forensic accountants do.
The adjective forensic apparently comes from the Latin word forensis, meaning “in open court” or “public.” When you describe something as forensic you usually mean that is has to do with production of evidence to solve a crime, or support a particular view based on the facts seen. It also means that it has to do with the courts or legal system.
What then do I do?
In essence, my role is to find the truth that is contained in what is usually masses of information, and draw the same conclusion that anyone else of similar experience and background might arrive at. That is to say the conclusions drawn should be independent and capable of being reached by anyone else following the same rules. That is why the report is capable of being produced in Court and is often used as an independent guide to what the information means.
In most cases information is incomplete and that is where the experience of a particular expert comes into play. The ability to work with incomplete information and extrapolate or interpret is a fundamental skill that an expert needs. Justifying the reasons behind drawing a conclusion means that another expert might be able to challenge the premise but not the conclusion. An example might help.
If a damages claim for loss of production occurs, and the expert says I have based my claim on an average profit of $1000 pertonne and another expert says it should be only $750 per tonne then the conclusion that there are damages is not being challenged, only the amount of damages. A good report will lead in this direction so that discussions centre on some details rather than the entirety of the report. Transparency and citation of sources is therefore fundamental to a good report.
The type of cases I work with include:-
- Explaining the marital finances in Family Law disputes.
- Loss claims where the actions of third parties causes a loss in profits.
- Review of charges as to fairness and reasonableness, perhaps in a joint venture.
- Small Business valuations.