How Important are Expert Witness Skills for a Fraud Investigator?

By: Mark Jenner

These days fraud is a huge problem. The ever increasing threat is made worse by the economic downturn. It is likely that there will be an increasing number of fraud cases that come to trial and this will mean a need for more expert accounting evidence.

Frauds can be difficult to comprehend. The nature of a fraud is that it is hidden away until it is uncovered, often by chance. Criminal fraudsters are looking for ways to take in a way that will not be noticed. Or at least will not be discovered until they are long gone. They seek means to carry out transactions that will be disguised within the accounting and business records of an organisation. Frauds often go undetected for a long time and many are likley never unearthed.

By hiding frauds within financial papers or computer programs, most people do not understand how they work. The accountant is more experienced in dealing with the confusing numbers and can follow the route taken by the 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. Particularly large frauds can be hard to prosecute owing to the complex nature of the financial activity. Most judges and juries will not understand double entry bookkeeping or off-balance sheet entries.

An expert witness, who is an accountant, is essential for presenting complex fraudulent transactions in a way that can be understood by the lay person. 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.

About the Author

Mark Jenner is a forensic accountant, a Fellow of the Institute of Chartered Accountants in England and Wales, a Certified Fraud Examiner and holds a Masters Degree in Fraud Investigation Management. His web site offers informative articles on fraud investigation fraud prevention and asset recovery together with advice on preventing money laundering. He regularly gives expert accounting evidence as an expert witness for the fraud regulators.

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