Skip to main content

Week 6: Forensic Accountants Role in Civil Trials

Forensic accountants (FA’s) all over Australia are contracted by clients to provide expert witness statements on particular matters.

The APES 215 states that a forensic accountant: (APESB, 2019):

  1. Has a duty to the court which overrides that of the client 
  2. Provide expertise in an objective and unbiased manner 
  3. Not to advocate for a party

Therefore, an FA’s duty is to the court in providing evidence based on expertise in particular court matters and not determining an innocent or guilty verdict.

The FA’s role is to investigate the quantification of loss or damages due to a guilty verdict. In most cases the investigation of damages is for their client, but in some matters, FA’s could be contracted to cross-examine work completed by another FA (such as in Labelmakers Group Pty Ltd v LL Force PtyLtd [2012]).

But how does a FA calculate the loss or damages for the successful plaintiff? Let’s say for instance a doctor is inappropriately performing their duty and knocks your new born baby on the head causing serious brain damage. One matter to be considered is the valuation of all future expenses which you as a parent would have to pay as a result of your child’s brain damage (such as medical bills, new fittings for your home to accommodate the disability etc.). Another matter is the effect of interest on the lump sum damages payment, as the money’s value will decrease over time (effects of inflation etc.). FA’s take this into account, usually through applying the RBA cash rate plus a further percentage that the judge sees fit (usually 4-6%) (interest is applied for pre- and post-judgement).


Additional Information: 


References 

APESB. (2019). APES 215 Forensic Accounting Serivces . Melbourne: Accounting Professional & Ethical Standards Board Limited.

Brisbane Consulting. (2021, April 28). How to Calculate Damages in Fraud Cases? [Video]. Youtube.

Comments

Post a Comment

Popular posts from this blog

Week 4: Relevance of the Court Heirarchy in the Forensic Accountant Role

A majority forensic accountant cases do not materialise to any formal litigation, so unsurprisingly, many cant see the reason to at least basically understand the Australian legal system.  However, when the time does come and the forensic accountant is required by the court to be an expert witness and provide a report of findings, the knowledge of the court system would prove vital.  Without knowing at least, the basic differences of these matters, it is easy to make errors which could lead to the whole report being “thrown out” by the court. When you are on the stand providing your findings with the barristers “firing” questions at you, ignorance of the law is no excuse for mistakes you make.  For instance, if you were caught spray painting the side of a building without consent from the owners and used the excuse that you didn’t know you were  able to express your artistic style wherever you pleased…you would be laughed out of the courtroom. The same goes for forensic accountants. Wh
Post a Comment
Read more