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Electronic copy available at: http://ssrn.com/abstract=1534705

An Empirical View of the Transparent Objectivity of Forensic Accounting Expert Witnesses.

James A. DiGabriele Department of Accounting, Law & Taxation

School of Business Montclair State University

One Normal Avenue Montclair, NJ 07042

P (973) 655-7288 F (973) 243-2646

[email protected] [email protected]

Abstract

This paper reports the views of forensic accountants, attorneys, and accounting

academics concerning the perception of forensic accounting expert witness transparency. The

results of Kruskal-Wallis tests comparing the three groups on their responses to each survey

statement indicated that the three groups were not equivalent in their responses to any of the nine

items. In addition to the nonparametric Kruskal-Wallis tests, one-way ANOVAs were performed

comparing the three groups on their mean response to these items. All one-way ANOVAs were

statistically significant, confirming the results from the Kruskal-Wallis tests. A series of Mann-

Whitney tests were performed comparing academics to forensic accountants, academics to

attorneys, and forensic accountants to attorneys using a Bonferroni correction. Forensic

accountants and attorneys differed on all survey items. Academics and forensic accountants

differed on the majority of survey items.

Electronic copy available at: http://ssrn.com/abstract=1534705

I. Introduction Forensic accounting experts may be classified within the following three groups;

testifying expert, consulting expert, and fact witness. A testifying expert generally appears

before a Trier of fact (Judge and/or Jury) and provides an opinion by deposition or testimony

before the court. A consulting expert may consult on an attorneys work product by formulating

strategy, reviewing documents, and additional support in resolving a case. When an accounting

expert is called to testify as a fact witness, they are expected to offer only factual information

regarding the case without rendering an opinion (Michaelson, 2005). The main differences lie

between the testifying expert and consulting expert. The testifying expert must be mindful of the

Daubert standard, which is codified in the Federal Rules of Evidence 702 and states; a witness

may only testify if, the testimony is based upon sufficient facts or data, the testimony is the

product of reliable principles and methods, and the witness has applied the principles and

methods reliably to the facts of the case. Thereby creating an environment where an expert’s

opinion should maintain a character of transparent objectivity. Conversely, a consulting expert

owes objectivity to the client rather than the Trier of fact. A consulting expert may advocate their

position on a client’s behalf (Michaelson, 2005).

The perception of objectivity is an important element for a forensic accountant engaging

in expert testimony. The transparency of an experts’ impartiality is vital from a critical position

because this ultimately establishes the credibility of the expert’s findings. Although, this primary

intention would rationally seem to be embedded within a forensic accounting expert’s disposition

it somehow gets lost in translation during actual testimony. Evidence may be seen in the Tax

Court. In Wagner Construction, Inc. v. CIR (2001); subsequent to considering the testimony

presented by both parties' experts, the Tax Court rejected both of their conclusions. The Court

determined that "the reports and testimony of the experts in this case are so dissimilar that the

reliability of the experts is brought into question.” The Court concluded that the experts acted as

advocates for their respective parties and stated; "the expert’s lack of impartiality has caused a

disservice to the Court and the system of tax administration.” Further confirmation may be

observed in a study by Beatty, Riffe and Thompson (1999), where the authors empirically

demonstrate the appearance of expert witness behavior also in the Tax Court. The results suggest

that experts deliberately testify in support of valuation estimates to minimize the tax payments of

the group compensating them. Similar issues are also observed in Federal district courts. In

Monsanto v. Tidball, (2009), the defendant retained an accountant and tax professor to present

expert testimony on economic damages claimed. According to the Court, the expert disregarded

the directives from the Federal Circuit on the appropriate method to measure damages in similar

cases. The Court claimed the expert’s opinions contradicted precedent. The experience of the

accounting expert was also questioned under the requirements of Rule 702 of the Federal Rules

of Evidence, and the Daubert standard. As a result, the court expressed reservations regarding the

expert’s objectivity and ultimately deemed the report “unreliable, untrustworthy, and unable to

assist the jury.”

When considering the facts, there appears to be a gap between the types of behavior that

may cause an expert to be perceived as less transparently objective by a Trier of fact and the

reflective point of view of the expert. While there is limited research on the forensic accountant

acting in an expert witness capacity, there have been studies on the skills of a forensic accountant

(DiGabriele, 2008), and the educational outcome of forensic accounting curriculum development

(Rezaee, Crumbley and Elmore, 2004). The common thread within both pieces of research is the

necessary skill of a forensic accountant to effectively engage in expert testimony.

This paper reports the views of forensic accountants, attorneys, and accounting

academics concerning the perception of forensic accounting expert witness transparency. A

survey instrument was prepared containing 10 statements; 9 based upon the motivating factors

illustrated in actual testimony and limited literature and 1 statement identifying the survey

participant.

This research makes several contributions to the academic research on forensic

accounting experts participating in expert testimony. First, this study provides important

information regarding the judgment of 3 major participants in forensic accounting testimony

before the court. This knowledge has the potential to influence future behavior of forensic

accountants engaging in expert testimony. Second, the knowledge from this study offers

evidence of areas where there is potential disconnect between perceptions of the forensic

accountant’s role in expert testimony. Third, the results of this paper will also serve the academic

community by introducing additional insight into the discipline of forensic accounting as courses

continue to populate contemporary Universities. Finally, this paper fills a void of shear lack of

research in this area while contributing directly to practice development in this professional

niche.

This paper is organized as follows; the next section reviews the literature that motivates

the statements in the survey instrument. Section III describes the methodology with section IV

illustrating the results. Section V will discuss the findings of the study, and the final section

concludes the paper.

II. Review of the Literature Forensic accounting expert testimony has been experiencing a higher level of assessment

since the codification of the Daubert standard within the Federal Rules of Evidence under rule

702. Harrison (2001) identifies this issue by using judicial opinions evaluating expert witness’

testimony and suggests that many judges have become increasingly skeptical of neutrality of

expert witnesses. Harrison (2001) offers Appellate comments from a decision in the Northern

District for the Seventh Circuit Court of Appeals regarding the testimony of an expert on

economic damages. According to the Appellate document the expert engaged in behavior that

abandoned the concept of objectivity by performing dual roles of expert and advocate. Pedneault

(2009) emphasized that in “everyday litigation” attorneys maybe inclined to use a single expert

in both roles for economic reasons. This type of monetary compromise during the pre-trial stages

of the litigation cycle does not emerge without potential threats to an expert’s lack of prejudice.

Pedneault (2009) affirms that there are risks and disadvantages associated with the cost

savings of using a single expert. An example is when a testifying expert attends a deposition

and/or trial testimony. The expert may wish to limit any notes they may take while attending

depositions and trial testimony because they are discoverable. This is problematic for a

testifying expert for such notes may reveal strategic suggestions to counsel which may be

perceived as a breach of impartiality. For this reason an attorney may prohibit a testifying expert

from attending the depositions and portions of trials to preserve expert objectivity. Pedneault

(2009) suggests that counsel should consider, in every matter, whether it makes sense to engage

two experts; a consulting expert to assist counsel in strategy and a testifying expert should

testimony of an expert be required in the matter.

Attorneys may also play a role that potentially impacts a testifying expert’s opinion.

There are times when attorneys include the expert in trial preparation and review their specific

line of questioning that reveals their verdict preference. The byproduct of this exercise is the

potential influence it may have on the expert’s testimony. Prior research on this issue indicates

that it does. Ricchiute (2004) found that hints of an attorney’s position in cases of auditor

liability directly influence an accounting expert’s testimony regarding auditor compliance with

generally accepted auditing standards (GAAS). This study used 45 participants from the

litigation services department of a Big 5 CPA firm. The author simulated an auditor liability

case environment that included audit working papers from a previously tried Big 5 auditor

liability case and found that attorneys indeed influence accounting expert testimony. According

to Weil, et. al, (2007) this behavior is not surprising because of the competing agendas of

attorneys and experts. An expert should wish to preserve the appearance of impartiality.

However, due to the innate nature of an advocate’s position it is common practice for an attorney

to reveal their verdict preference when preparing for trial to the expert witness.

When partitioning the dynamics of advocacy within the context of a litigation setting, the

positions of the attorney and expert may be segregated as follows; the attorney is an advocate for

the client and the expert is an advocate for the position illustrated in their expert report

(Michaelson, 2005). This is not always what a client desires when compensating an expert hence

producing an expectation gap which turns into a structural problem. The problem is the

difference between actual impartiality and what the attorney/client requests to purchase from the

expert, which can termed in their view as "effectiveness" (Harrison, 2001).

Forensic accounting experts can provide significant support to attorneys in all phases of a

case. In large, complex cases, the roles of attorneys and consulting experts are similar in that

experts are frequently requested to critique information from which conclusions can be made. In

addition to advising attorneys on whether there is a legitimate case to pursue. This is the area

where the maintenance of impartiality may be problematic. The consulting expert becomes

similar to a star player with the attorneys acting as a coach creating what some refer to as a

“hired gun” (Harrison, 2001). The “hired gun” expression may be further perceived when the

same expert is consistently retained by either a plaintiff or defendant attorney according to the

needs of a case (Hill, et. al., 2009). This sentiment is consistent with prior research. In a

questionnaire presented to jurors Ivkovic and Hans (2003) presented the statement; “Lawyers can

always find an expert who will back up their client’s point of view no matter what.” The

response of 269 civil jurors was 16% strongly agree, 56% agreed, 15% neither agreed or

disagreed, 10% disagreed, and 2% strongly disagreed. This sends a strong message of perception

from a group that ultimately decides the survival of an expert’s findings in testimony. However,

others maintain that a well informed savvy expert will understand the greater incentive to

preserve the goodwill of their professional reputations by refraining from rendering opinions

lacking sound methodologies (Harrison, 2001).

Suggestions to curb issues such as expert impartiality in expert testimony has been

proposed in the medical expert witness system. Jiang (2006) recommends a system built around

court-appointed experts. Under the current adversarial system, the parties are incentivized to hire

favorable experts which may contribute to objectivity issues. A reasonable solution proposed by

Jiang (2006) is to change partisan selection to appointment by the court. The use of court-

appointed experts may reduce these types of issues to some extent however, still be challenging.

The courts inherently do not have the time or resources as the parties do to select experts

appropriately. The Court has also expressed, “appointing experts conflicts with the sense of the

judicial role, which is to trust the adversaries to present information and arguments” (Jaing,

2006).

This study presents the views of three significant stakeholders and attempts to provide an

important understanding that may be effective in shaping the discipline of forensic accounting

expert testimony. Insight from accounting academics is important since this group is responsible

for educating future forensic accountants and this knowledge will be valuable in the classroom.

The view of forensic accountants is vital since they are in the forefront and may be able to

provide information that is explanatory to identify potential areas of misunderstanding that

instinctively translates into growth. Attorney’s perspectives are essential because they hire

forensic accountants and understand the rules governing expert witnesses.

III. Methodology A nationwide survey was conducted for a random sample of 1,425 accounting academics,

forensic accounting practitioners and attorneys. The sample was compiled as follows; 475

random e-mail addresses were retrieved for faculty members from accounting departments of

various universities across the nation; for forensic accounting practitioners, 475 random e-mail

addresses were retrieved from several membership databases and from a Google search using the

term “forensic accountants”; 475 random e-mail addresses were retrieved from a Google search

of attorneys practicing commercial litigation, economic damages, and matrimonial dissolution.

These types of attorneys often use forensic accountants for expert opinions in cases involving

commercial/economics damages, business valuation, and fraud. The survey instrument employed

was prepared, pre-tested and e-mailed. The instrument is contained in Appendix A. Participants

were e-mailed using www.surveymonkey.com and were asked the extent to which they agreed

with the survey statements regarding forensic accounting expert witness transparency. The

agreement ratings were made on a five-point Likert scale ranging from “strongly agree” to

“strongly disagree.” The following scores were assigned to each response: strongly agree, 1;

agree, 2; neither agree nor disagree, 3; disagree, 4; strongly disagree, 5.

Descriptive statistics were computed for the responses to nine statements (percentages

within each category for each group), the tenth statement asked for the participant to identify

themselves as either a forensic accountant, accounting academic or attorney. A principal

component analysis was then performed to examine the underlying structure of the nine items.

The eigenvalues-greater-than-one rule was used to determine the number of components to

extract and rotate. Descriptive statistics (ranges, means, standard deviations, and internal

consistency reliability coefficients) were then computed for the composite scores resulting from

the principal component analysis. A principal component analysis was conducted to examine the

dimensionality of the nine survey items. For this analysis, all items were scored so that higher

values were indicative of an attitude demonstrating a higher level of transparent objectivity. The

principal component analysis yielded two components with eigenvalues-greater-than-one (5.35

for the first component explaining 59.4% of the variance and 1.00 for the second component

explaining an additional 11.2% of the variance). However, when a varimax rotation was applied

to the first two components, the second component consisted of a single item (“A forensic

accountant is court appointed as a testifying expert. The forensic accountant is perceived to be

more objective than an expert retained by the plaintiff or defendant”). Despite the fact that this

item produced a second component, it was positively correlated with all other items (with

Pearson r’s ranging from .13 to .45), indicating that it was reasonable to include it on the overall

composite score. Thus, it was concluded that there was a single interpretable component among

the nine items, with eight of the nine items having their highest loading on this component. The

internal consistency reliability coefficient for the composite score consisting of all nine items

was .91. Kruskal-Wallis tests were performed to compare the responses of the three groups with

a series of Mann-Whitney tests as a post hoc procedure.

IV. Results Descriptive Statistics

A total of 258 individuals completed surveys. Of these, there were 85 academics (32.9%),

87 forensic accountants (33.7%), and 86 attorneys (33.3%). The overall response rate was

18.11%.

Table 1 shows the percentage of participants in each of the three groups (and overall)

responding with each option to each of the nine survey items. Overall, the statements that the

participants agreed most strongly with were “Two independent forensic accountants are retained

for the same case. One is retained as a consulting expert and the other as a testifying expert. This

scenario may preserve objectivity” (with 46.9% strongly agreeing and 31.8% agreeing), and “A

forensic accountant who is retained predominately by a specific attorney may appear to

demonstrate less transparent objectivity” (with 41.4% strongly agreeing and 34.9% agreeing).

The participants disagreed most strongly with the statements “A forensic accountant is

retained as a testifying expert. During cross examination the forensic accountant becomes aware

of information that was initially requested from the retaining attorney that was deemed

“unavailable” at the time of request. It is best for the forensic accountant to “stick” to their

opinion even though this information may change the results of the expert report on which they

are testifying” (with 55.8% strongly disagreeing and 36.8% disagreeing) and “A forensic

accountant retained as a testifying expert can advocate on a client’s behalf in their expert report

and/or testimony” (with 47.3% strongly disagreeing and 29.1% disagreeing).

Inferential Analyses on Group Differences

Table 2 shows the results of Kruskal-Wallis tests comparing the three groups on their

responses to each of the nine items. In each case, the Kruskal-Wallis test was statistically

significant, with all p values less than .01. This indicated that the three groups were not

equivalent in their responses to any of the nine items. In addition to the nonparametric Kruskal-

Wallis tests, one-way ANOVAs were performed comparing the three groups on their mean

response to these items. All nine one-way ANOVAs were statistically significant, confirming the

results from the Kruskal-Wallis tests.

To follow up the Kruskal-Wallis tests, a series of Mann-Whitney tests were performed

comparing academics to forensic accountants, academics to attorneys, and forensic accountants

to attorneys. Given the number of statistical Mann-Whitney tests performed, a Bonferroni

correction was applied in which each result was considered statistically significant only if the p

value fell below .0167 (.05 / 3).

The results of these tests are shown in Table 3. Forensic accountants differed from both

attorneys and academics in terms of their level of agreement with the statement “A forensic

accountant can be a testifying expert and consulting expert on the same case without

compromising objectivity.” The percentages in Table 1 indicated that forensic accountants were

more likely to strongly agree with this statement than academics (with 21.8% of forensic

accounts strongly agreeing compared to 2.4% of academics) and than attorneys (of which only

4.7% strongly agreed). Academics and attorneys did not differ in their level of agreement with

this statement.

The next section of Table 3 shows that forensic accountants differed from academics and

attorneys in their level of agreement to the statement “If a forensic accounting expert prepares an

expert report and is present at an opposing expert’s deposition to consult their retaining attorney,

such actions may compromise the expert’s objectivity.” Table 1 shows that 42.4% of academics

and 54.7% of attorneys strongly agreed with this statement, while only 20.7% of forensic

accountant strongly agreed. Academics and attorneys did not differ from each other.

Forensic accountants differed from the two other groups in their level of agreement with

the statement “Two independent forensic accountants are retained for the same case. One is

retained as a consulting expert and the other as a testifying expert. This scenario may preserve

objectivity.” Attorneys were most likely to strongly agree with this statement (with 65.1%

strongly agreeing compared to 45.9% of academics and only 29.9% of forensic accountants).

Attorneys and academics did not differ with respect to their level of agreement with this

statement.

Forensic accountants differed from both academics and attorneys in their level of

agreement with the statement “A forensic accountant is retained as a testifying expert. In a

conversation with the attorney the forensic accountant requests documents; the attorney also

discusses their line of argument. This discussion may prejudice the testifying expert’s

conclusions in their expert report.” Table 1 shows that again it was attorneys who were most

likely to strongly agree with this statement (62.8%) followed by academics (45.9%), with only

(21.8%) of forensic accountants strongly agreeing with this statement. Again, academics and

attorneys did not differ with respect to their level of agreement with this statement.

Attorneys differed from both academics and forensic accountants on their level of

agreement with the statement “A forensic accountant retained as a testifying expert can advocate

on a client’s behalf in their expert report and/or testimony.” Attorneys were more likely to

strongly disagree with this statement (60.5%) than either forensic accountants (40.2%) or

academics (41.2%). Academics and forensic accountants did not differ.

All three groups differed in terms of their responses to the statement “A forensic

accountant who is retained predominately by a specific attorney may appear to demonstrate less

transparent objectivity.” Table 1 shows that attorneys were more likely to strongly agree with

this statement (60.5%) than academics (43.5%), with only (19.5%) of forensic accountants

strongly agreeing.

Attorneys differed from forensic accountants on their level of agreement with the

statement “A forensic accountant is retained as a testifying expert. During cross examination the

forensic accountant becomes aware of information that was initially requested from the retaining

attorney that was deemed “unavailable” at the time of request. It is best for the forensic

accountant to “stick” to their opinion even though this information may change the results of the

expert report on which they are testifying.” Attorneys were more likely to strongly disagree with

this statement (68.6%) than forensic accountants (46.0%). Academics did not differ from either

attorneys or forensic accountants in their level of agreement with this statement.

All three groups differed with respect to their level of agreement with the statement “A

review of a forensic accountant’s curriculum vitae indicates that their retention for expert

testimony is predominately for plaintiff work. This history may indicate the perception that the

expert’s objectivity is compromised towards decisions in the plaintiff’s favor.” As seen in Table

1, 62.8% of attorneys strongly agreed with this statement, followed by 38.8% of academics, with

only 17.2% of forensic accountants strongly agreeing. For the final statement, “A forensic

accountant is court appointed as a testifying expert. The forensic accountant is perceived to be

more objective than an expert retained by the plaintiff or defendant,” attorneys differed from

forensic accountants. Table 1 shows that nearly all of the attorneys agreed (94.2%) or strongly

agreed (3.5%) with this statement, compared to 62.1% of forensic accountants (with 48.3%

agreeing and 13.8% strongly agreeing).

The final analysis consisted of a comparison of the three groups on a composite score

based on all nine survey items. As was the case for the principal component analysis discussed

above, all items were scored so that higher values were indicative of an attitude demonstrating a

higher level of concern for transparent objectivity prior to computing the composite score. A

one-way ANOVA was performed comparing the three groups on this composite score, and the

result was statistically significant, F (2, 255) = 43.79, p < .001. Follow up Tukey HSD tests

indicated that all three groups were significantly different from each other (p < .05 based on the

Type I error protection offered by the HSD test). Examining the means indicated that attorneys

(M = 39.58, SD = 6.04) had the highest scores, followed by academics (M = 36.74, SD = 6.89),

with forensic accountants having the lowest scores (M = 29.89, SD = 7.95).

V. Discussion Survey statements were presented to forensic accounting practitioners, accounting

academics, and attorneys to obtain their views on circumstances that may be interpreted or

perceived as a potential departure from forensic accounting expert impartiality. In addition to

the views of these three groups, the technology of using an electronic survey instrument provided

an opportunity for respondents to include commentary regarding their response. As a result,

some provided insightful observations.

A greater component of the results indicated that when a forensic accounting expert

engages in the dual roles of expert and consultant it may compromise the effectiveness of their

findings. Comments from forensic accounting practitioner survey participants indicate that a

consulting expert often becomes a testifying expert and should therefore remain objective in both

roles. Accounting academic and attorney remarks suggest that the forensic accounting expert

should remain impartial in the expert role, allow the attorneys to be the advocate, and if

participating in case strategy as a consultant, impartiality will naturally shift to favor the

compensating client. The views of forensic accountants significantly differed from academics

and attorney on the first three survey statements which had the implication of the perception of

the forensic accounting expert participating in dual roles. A potential factor for this disagreement

may lie within the forensic accountant and their perception of being effective in their work

product. This effectiveness naturally leads to the belief that future engagements should follow.

The simple perception of forensic accounting expert objectivity appears to also present

itself in what can generally be construed as an innocuous proposition. Survey statements

centered on conversations with retaining attorneys, testifying for a majority of either plaintiffs or

defendants, and merely being engaged predominantly by a particular attorney also appear to

imply objectivity issues for forensic accounting experts. Commentary from attorney participants

that remained in the forefront of the dialog on this issue include, that attorneys always want to

prejudice experts with the intention of obtaining a favorable verdict for their client. This can be

counterintuitive to case results. The most prevalent consequence of this technique is jeopardizing

the expert’s credibility. The remarks from academics and forensic accountants on this general

topic ranged from “a forensic accountant should remain impartial regardless” to “it depends”.

However, the issue of the forensic accountant being repeatedly retained by the same attorney and

testifying in favor of a particular litigating position was met with very interesting observations.

Attorneys stated that asking questions in depositions regarding the majority of the type of work

an expert engages in (plaintiff or defendant) and how many times the expert has been retained by

an attorney are “front line questions” that intended to undermine expert credibility. Whereas

academics believed that objectivity in appearance may be impaired but, not necessarily in fact.

The forensic accountants remarked that this is just a common tactic by the defense.

VI. Conclusion Forensic accounting is expected to experience rapid growth over the foreseeable future

(Stimpson 2007). In consideration of the issues exposed by this study, academic curriculum and

forensic accounting organizations conferring certifications in the discipline may wish to

implement course content and continuing education requirements that refine and clarify

objectivity issues. It may be said that such requirements are explicit in the codes of conduct in all

organizations granting forensic accounting certifications. However, there are subtleties within a

forensic accounting discipline that may need to be reinforced through future academic courses

and continuing professional education. One such example is the mandatory ethics course that is

now required by regulatory authorities for Certified Public Accountants to maintain licensure. A

similar requirement may be implemented by forensic accounting certifications on issues that

have been identified in this study.

Future research in this area may progress to experimental designs that measure the

influence of additional education on topics such as; Daubert standard updates and contemporary

issues in court testimony.

The limitation of the current study, as an inherent attribute with survey research, is non-

response bias. The only way to evaluate this was to test late responses to earlier results. There

were no significant differences.

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Table 1

Responses to Survey Items as a Function of Group (N = 258)

Statement

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

A forensic accountant can be a testifying expert and consulting expert on the same case without compromising objectivity.

Academics 2.4% 12.9% 3.5% 25.9% 55.3% Forensic Accountants 21.8% 41.4% 2.3% 9.2% 25.3% Attorneys 4.7% 7.0% 1.2% 23.3% 64.0% Total 9.7% 20.5% 2.3% 19.4% 48.1%

If a forensic accounting expert prepares an expert report and is present at an opposing expert’s deposition to consult their retaining attorney, such actions may compromise the expert’s objectivity.

Academics 42.4% 32.9% 8.2% 12.9% 3.5% Forensic Accountants 20.7% 11.5% 0.0% 41.4% 26.4% Attorneys 54.7% 30.2% 2.3% 9.3% 3.5% Total 39.1% 24.8% 3.5% 21.3% 11.2%

Two independent forensic accountants are retained for the same case. One is retained as a consulting expert and the other as a testifying expert. This scenario may preserve objectivity.

Academics 45.9% 45.9% 7.1% 1.2% 0.0% Forensic Accountants 29.9% 24.1% 27.6% 12.6% 5.7% Attorneys 65.1% 25.6% 8.1% 1.2% 0.0% Total 46.9% 31.8% 14.3% 5.0% 1.9%

table continues

Statement

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

A forensic accountant is retained as a testifying expert. In a conversation with the attorney the forensic accountant requests documents; the attorney also discusses their line of argument. This discussion may prejudice the testifying expert’s conclusions in their expert report.

Academics 45.9% 32.9% 4.7% 14.1% 2.4% Forensic Accountants 21.8% 4.6% 11.5% 44.8% 17.2% Attorneys 62.8% 23.3% 2.3% 10.5% 1.2% Total 43.4% 20.2% 6.2% 23.3% 7.0%

A forensic accountant retained as a testifying expert can advocate on a client’s behalf in their expert report and/or testimony.

Academics 8.2% 15.3% 7.1% 28.2% 41.2% Forensic Accountants 5.7% 13.8% 11.5% 28.7% 40.2% Attorneys 1.2% 7.0% 1.2% 30.2% 60.5% Total 5.0% 12.0% 6.6% 29.1% 47.3%

A forensic accountant who is retained predominately by a specific attorney may appear to demonstrate less transparent objectivity.

Academics 43.5% 37.6% 4.7% 12.9% 1.2% Forensic Accountants 19.5% 33.3% 10.3% 33.3% 3.4% Attorneys 60.5% 33.7% 2.3% 1.2% 2.3% Total 41.1% 34.9% 5.8% 15.9% 2.3%

table continues

Statement

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

A forensic accountant is retained as a testifying expert. During cross examination the forensic accountant becomes aware of information that was initially requested from the retaining attorney that was deemed “unavailable” at the time of request. It is best for the forensic accountant to “stick” to their opinion even though this information may change the results of the expert report on which they are testifying.

Academics 1.2% 1.2% 4.7% 40.0% 52.9% Forensic Accountants 1.1% 1.1% 8.0% 43.7% 46.0% Attorneys 0.0% 1.2% 3.5% 26.7% 68.6% Total .8% 1.2% 5.4% 36.8% 55.8%

A review of a forensic accountant’s curriculum vitae indicates that their retention for expert testimony is predominately for plaintiff work. This history may indicate the perception that the expert’s objectivity is compromised towards decisions in the plaintiff’s favor.

Academics 38.8% 35.3% 9.4% 15.3% 1.2% Forensic Accountants 17.2% 34.5% 10.3% 29.9% 8.0% Attorneys 62.8% 31.4% 4.7% 1.2% 0.0% Total 39.5% 33.7% 8.1% 15.5% 3.1%

A forensic accountant is court appointed as a testifying expert. The forensic accountant is perceived to be more objective than an expert retained by the plaintiff or defendant.

Academics 11.8% 72.9% 8.2% 7.1% 0.0% Forensic Accountants 13.8% 48.3% 19.5% 16.1% 2.3% Attorneys 3.5% 94.2% 1.2% 1.2% 0.0% Total 9.7% 71.7% 9.7% 8.1% .8%

Table 2

Results of Kruskal-Wallis Tests for Group Differences

Statement χ2 df p A forensic accountant can be a testifying expert and consulting expert on the same case without compromising objectivity. 51.95 2 <.001

52.92 2 <.001

Two independent forensic accountants are retained for the same case. One is retained as a consulting expert and the other as a testifying expert. This scenario may preserve objectivity.

36.96 2 <.001

59.59 2 <.001

A forensic accountant retained as a testifying expert can advocate on a client’s behalf in their expert report and/or testimony. 13.60 2 .001

A forensic accountant who is retained predominately by a specific attorney may appear to demonstrate less transparent objectivity. 45.87 2 <.001

9.49 2 .009

54.31 2 <.001

A forensic accountant is court appointed as a testifying expert. The forensic accountant is perceived to be more objective than an expert retained by the plaintiff or defendant.

13.09 2 .001

Table 3

Results of Mann-Whitney Follow Up Tests for Group Differences

Academics v.

Forensic Accountants

Academics v.

Attorneys

Forensic Accountants v.

Attorneys Statement z p z p z p A forensic accountant can be a testifying expert and consulting expert on the same case without compromising objectivity.

-5.82 <.001 -1.16 .244 -6.35 <.001

-5.71 <.001 -1.71 .087 -6.56 <.001

Two independent forensic accountants are retained for the same case. One is retained as a consulting expert and the other as a testifying expert. This scenario may preserve objectivity.

-4.32 <.001 -2.18 .029 -5.59 <.001

-5.84 <.001 -2.15 .032 -7.04 <.001

A forensic accountant retained as a testifying expert can advocate on a client’s behalf in their expert report and/or testimony.

-.08 .937 -3.20 .001 -3.27 .001

table continues

Academics v.

Forensic Accountants

Academics v.

Attorneys

Forensic Accountants v.

Attorneys Statement z p z p z p

A forensic accountant who is retained predominately by a specific attorney may appear to demonstrate less transparent objectivity.

-4.24 <.001 -2.63 .009 -6.57 <.001

-1.00 .317 -2.07 .039 -3.03 .002

-3.82 <.001 -3.81 <.001 -7.25 <.001

A forensic accountant is court appointed as a testifying expert. The forensic accountant is perceived to be more objective than an expert retained by the plaintiff or defendant.

-2.39 .017 -.77 .438 -3.46 .001

Appendix A. Forensic Accountants are frequently engaged in litigating matters to assist in analyzing, interpreting, summarizing and finally presenting their expert opinion to assist a Trier of Fact (Judge and/or Jury). The following statements present conditions that may arise during expert testimony before a Trier of Fact; address each statement in this context (an expert testifying before a Trier of Fact) and indicate whether you would agree strongly, agree, neither agree nor disagree, disagree or disagree strongly with the interpretation and/or perception of the expert’s transparency.

1. A forensic accountant can be a testifying expert and consulting expert on the same case without compromising objectivity.

2. If a forensic accounting expert prepares an expert report and is present at an opposing expert’s deposition to consult their retaining attorney, such actions may compromise the expert’s objectivity.

3. Two independent forensic accountants are retained for the same case. One is retained as a consulting expert and the other as a testifying expert. This scenario may preserve objectivity.

4. A forensic accountant is retained as a testifying expert. In a conversation with the attorney the forensic accountant requests documents; the attorney also discusses their line of argument. This discussion may prejudice the testifying expert’s conclusions in their expert report.

5. A forensic accountant retained as a testifying expert can advocate on a client’s behalf in their expert report and/or testimony.

6. A forensic accountant who is retained predominately by a specific attorney may appear to demonstrate less transparent objectivity.

7. A forensic accountant is retained as a testifying expert. During cross examination the forensic accountant becomes aware of information that was initially requested from the retaining attorney that was deemed “unavailable” at the time of request. It is best for the forensic accountant to “stick” to their opinion even though this information may change the results of the Expert Report on which they are testifying.

8. A review of a forensic accountant’s curriculum vitae indicates that their retention for expert testimony is predominately for plaintiff work. This history may indicate the perception that the expert’s objectivity is compromised towards decisions in the plaintiff’s favor.

9. A forensic accountant is court appointed as a testifying expert. The forensic accountant is perceived to be more objective than an expert retained by the plaintiff or defendant.

10. Please identify yourself: Academic, Forensic Accountant, Attorney