The Role of the Expert Accountant as a Witness in Fraud Cases

Fraud threatens all leading economies. Many new ones come to light as the recession bites deeper. An increase in fraud cases will mean an increase in those that are needed to deal with them - including the expert accounting witnesses used to present the cases at court.

Frauds can be difficult to comprehend. The very nature of the crime means that it is usually hidden until it is discovered, often by accident. Criminal fraudsters are looking for ways to take in a way that will not be noticed. Or it might not be brought to light until they have moved on to another job. They are looking for a way to disguise illegal acts within the accounting records. Some frauds can go on unnoticed for many years and it is likely that many are never discovered.

Hiding frauds within the ledgers and day-books, or worse still within the computer records, means that the average person will not easily understand any anomalies that might be there. However, an accountant who is used to dealing with complex chains of numbers is better able to follow the audit trails of any missing money.

On discovery, a fraud will normally be investigated in order to prosecute the culprit - who will then be punished as an example to others. Complex frauds can be very difficult to prosecute because of the confusing nature of financial transactions. Generally courts do not understand the finer points of accounting that are being exploited by the fraudster.

An expert accounting witness is needed to present the confusing financial transactions behind the fraud in a way that can be easily understood by the non-accountant. They are more than just an expert in their subject of accounting - they must also be an expert in presenting the information. This can be in the form of a report but they must also be able to answer cross examination by the barristers and judge.

The person carrying out the fraud investigation is often a police officer. These capable investigators are highly competent at chasing the financial information and obtaining supporting evidence through interviewing suspects and other witnesses. However, they are often not able to present the complex money trails in a report that the court readily understands. This is why in the more complex cases that a forensic accountant, who is an experienced expert witness in his field of fraudulent accounting practices, is often called upon to assist in the case.

By utilising such an expert early on in a fraud case, the forensic accountant is able to contribute to the investigation process by focusing on the areas of accounting problems and avoiding wasted work following up every avenue that the police might think worth looking at. Then, when the matter comes to court, the expert witness has a deeper understanding of the fraud and is better placed to help both sides understand the factual financial evidence by presenting a sound opinion on its interpretation.