Roles of the Financial Expert in
Providing Litigation Support Services
Litigation involving financial matters is commonplace. Whether it’s the
valuation of a business, the amortization of intangible assets, calculating
a business’s net earnings or performing damage calculations, many financial
issues may arise.
Accordingly, there are a host of reasons why an expert may be necessary in
some capacity to build or bolster your case. There are three broad areas in
which financial experts, such as CPAs, provide support to litigators and add
value in a courtroom—consulting, being an expert witness and providing
other services (such as acting as a court-appointed expert or arbitrator) or acting as a mediator on behalf of a client. So, whether it’s conducting a
fraud investigation or other forensic service or acting as an expert
witness at trial, a CPA can be an invaluable resource for the litigator.
Consulting Services
A consultant acts in the capacity of a non-testifying advisor. Forensic
accounting (including computer forensics), valuation and appraisal services
and assistance with preliminary damage assessment and case strategy
development are some of the broad areas in which the services of a CPA can
be invaluable in the litigation process.
Forensic accounting includes:
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Fraud investigations
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Disputes relating to royalty audits
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Valuation and appraisal services (including damage assessment)
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Fair market valuation of a business or an intangible asset
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Computer forensics (capturing, preserving and analyzing electronic information)
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Quantifying damages, including those for business interruption and claims preparation or dispute purposes
Expert
Witness
CPAs are retained and designated as experts to render an opinion to the
judge or jury as to a variety of matters in dispute—whether it’s to help
convey the meaning and impact of financial transactions or to decipher
information on audits, tax or financial statements. The CPA may also be
called upon to dispute the assumptions, analysis and/or conclusions of
opposing counsel’s expert testimony or report.
Other Miscellaneous Litigation Services
In their expert capacities, CPAs may also be called upon by courts to serve
as an impartial trier of fact, special master, court-appointed expert,
referee or arbitrator. They can also use their expertise to assist in the
mediation process on behalf of a client.
Conclusion
Virtually every litigated issue or matter contains some financial element.
Even if the underlying subject matter in dispute doesn’t appear to be
centrally related to accounting, a financial expert’s role can be
substantial as it can relate to damages, interest accrual or penalty
calculations. Like any other specialty where it is advisable or imperative
to have the support of an expert, financial issues require attention up
front and throughout the litigation or negotiation process.
Please contact a member of Somerset's Litigation &
Valuation Team for your litigation support needs.
This newsletter is provided by
Somerset for our clients and other interested persons upon request.
Since technical information is presented in generalized fashion, no
final conclusion on these topics should be made without further review.
For additional information on the issues discussed, please contact
Steve Riddle,
Tom
Thieme,
Rex Collins or
Doug
Ayres
of our
Litigation & Valuation Team.
This document is not intended or written to be used, and cannot be used,
for the purpose of avoiding tax penalties that may be imposed on the
taxpayer.
Somerset CPAs,
P.C.
3925 River Crossing Parkway, Third Floor
Indianapolis, Indiana 46240
317.472.2200 • 800.469.7206 • FAX 317.208.1200
www.somersetcpas.com
