A forensic accountant is a professional who possesses both accounting and investigation
skills to carry out investigation activities relating to business entities or individuals. The
professional must use his professional skills and prowess effectively so that he can properly
apply financial principles and theoretical frameworks to handle issues such as legal disputes
(Yang & Lee, 2020). In the specific context relating to a potential land purchase, a land
development company has sued the hired engineer and architecture firm for the breach of
contract, negligence and restitution and reliance. For providing appropriate validation of the
losses in the context and serving as an expert witness in the court of law, it is instrumental for
the forensic accountant to act in a responsible, accountable, objective and ethical manner. In
order to carry out his responsibilities in the most professional manner, the professional must
make sure to use his knowledge in the accounting area and rely on his past experience to
ensure justice prevails (Hamdan, 2019). He must think in a rational and pragmatic manner so
that the actual meaning can be deciphered from the available evidence. In addition to using
his skills relating to the specialized area, it is necessary to integrate ethical principles such as
honesty, integrity and transparency so that the possibility of malpractice or fraud can be
identified.
The forensic accountant can demonstrate professional care, integrity and objectivity by
ensuring that the appropriate professional standards are maintained throughout the
engagement and acting in an independent manner so that he would not get influenced by
either of the parties. According to the American Institute of Certified Public Accountants
(AICPA), every member AICPA member is supposed to follow the Code of Professional
Conduct so that he is able to carry out his duties in a competent and responsible manner
(Professional responsibilities. AICPA). It is imperative to rely not only on professionalism but
also on moral judgement so that all the activities can be carried out thoroughly by upholding
justice and fairness. After conducting the investigation activities, the accountant must also
have to carry out proper communication so that the flow of information can be made in a
transparent way and without any form of bias. He must rely on his skills and capabilities to
conduct a detailed and holistic investigation process that can help to calculate the exact loss
that has been incurred by the land development business. He must deploy forensic accounting
as a strategic tool to identify any kind of violations or mis agreements that may have
contributed to the adverse consequences for the company (Jain & Lamba, 2020).
The expert witness testimony by the forensic accountant has the potential to carry significant
weightage in the trial between the two companies. It is the responsibility of the professional to
act in an objective manner while performing the valuation for the losses so that a fair outcome
can be arrived at (Jonathan & Okoye, 2019). He must use verifiable and authentic pieces of
evidence and help the attorney prosecute the relevant party to address the dispute.
One role forensic accountant have is to be expert witnesses and give testimony in court. There
are certain principles that guide forensic accountants in this role. The AICPA Professional
Standards are designed to establish and maintain trust between a forensic accountant and their
client and between the forensic accountant and the court. The rules of professional conduct a
forensic accountant must follow include independence, integrity and objectivity, general
standards (professional competence, due professional care, planning and supervision, and
sufficient relevant data), compliance, accounting principles, responsibilities to clients, etc
(Rufus et al, 2015).
To demonstrate due care, the forensic accountant should perform professional services to the
best of their ability and maintain a high level of competence. This means a commitment to
learning and continually striving for professional improvement. Additionally, the forensic
accountant should not perform work that exceeds their ability, and either bring in a consultant
or refer the work to someone else should that situation occur (AICPA). Objectivity refers to
the forensic accountant remaining impartial, intellectually honest, and free of conflicts of
interest. Should the forensic accountant have a reason to not remain objective, such as having
stock in the company they are testifying for or a longstanding friendship with the CEO, then
they should decline work or testifying for this company. A forensic accountant should
maintain a high level of integrity because the public’s trust is built on this quality. To
demonstrate integrity, a forensic accountant should be honest and should not perform work
for personal gain (AICPA).
As the forensic accountant serving as the expert witness, he or she must demonstrate
professional care, objectivity, and integrity. The AICPA outlines the importance of these
while working any engagement. To provide professional care, the accountant must be able to
provide quality services (AICPA). In preparation for court, they must gain the proper
knowledge of zoning and architectural development regulations and obtain the necessary
training and/or education to be able speak on the topic accurately and freely. Professional care
also looks like setting fees for the arrangement, as well as offering additional services outside
of serving as the expert witness (AICPA).
d d d d d d d d Objectivity can often be paired with independence in accounting. Objectivity allows
the forensic accountant to remain impartial, intellectually honest, and free of conflict of
interest (AICPA). If he or she is biased to one side or the other, the attestation services can be
heavily affected. For example, in this case the forensic accountant serving as the expert
witness would not be working with objectivity if they had a personal relationship with the
architect because this may sway the way they present their testimony or cause them to neglect
essential information while testifying in court. Working an engagement without objectivity is
a violation on the AICPA’s Code of Professional Conduct.
d d d d d d d d d d d d d d Lastly, integrity is an important trait to have in all walks of life, however in this case
it is a requirement. Integrity requires honesty under all circumstances. Integrity is measured in
terms of what is right and just (AICPA). This means that if there are no specific rules and laws
set in place for the scenario the accountant is in, he or she must then turn to the concept of
ethics to come to a final judgment. If the accountant does not do so in this case, it can lead to
an unfair ruling of the case.
Forensic Accountants must demonstrate professional care, objectivity, and integrity in
performing any engagement. For this case of valuation of loss in a failed business venture,
the forensic accountant should have the knowledge, skill, experience, training, or education
on the topic of a feasibility study on a potential land purchase and what is suitable land for
development. d This would allow the forensic accountant to be an expert witness in the cases.
Additionally, forensic accountants must perform their services with the highest level of
professionalism. Individuals can find guidance in the Association of International Certified
Professional Accountants (AICPA) code of professional conduct and bylaws and the Federal
Rules of Evidence for the guidelines of professional responsibilities (Rufus, Miller, & Hahn,
2015). For example, AICPA Rule 101; Independence, Integrity, and Objectivity;
demonstrates an accountant’s ability to be independent which leads to integrity and
objectivity. d This means a forensic accountant must be free of conflicts of interest in each case
one is involved in (Professional responsibilities 2014). In other words, the forensic
accountant should not have a relationship or the appearance of a relationship with another
individual, entity, product, or service that could influence the forensic accountant’s
professional judgement or be viewed by others as an impairment of the accountant’s point of
view. Through this independence it allows the forensic accountant to act with integrity,
objectively, and with professional skepticism. In addition, with the land case of valuation, a
forensic accountant’s testimony should focus on the General Standards Rule 201 This rule
includes the process of professional competence, due process care, planning and supervision,
and sufficient relevant data (Rufus et al, 2015). As a result, to be competent an individual
must have the professional background and experience in land valuation and what is required
for land to be developed to help the client in this case.
Therefore, an individual must be aware of their skills and experience as a forensic accountant.
This illustrates due professional care because an effort was implemented in determining
independence and objectivity. Which this establishes the duty to observe the technical and
ethical standards of the case. Also, this promotes service to the client and courts to ensure
one’s capable of providing the necessary information in a timely manner. Plus, without the
knowledge, skill, and experience the forensic account may not be able to interpret the data or
provide sufficient information to provide an opinion in the case. d Additionally, objectivity and
independence provide a foundation that the opinion is not bias and based on the merits of the
information. Meanwhile, if a forensic accountant provides inaccurate information, then the
reputation of the individual will be less creditable currently and in the future cases. This
would result in the possibility of the accountant being forces to retire from the field.
In this situation where a forensic accountant is hired specifically to value the losses and serve
as an expert witness, it's already their job to demonstrate such professional conduct. The
Association of International Certified Public Accountants (AICPA) have established a code
which includes six principles that encompass moral behavior (Rufus, Miller, & Hahn, p.298,
2014). In the case described, the forensic auditor has responsibilities to the company that
hired them, as well as the public. The forensic accountant must convey "integrity, objectivity,
due professional care, and a genuine interest in serving the public" (Rufus, et. al., p. 298,
2014). The forensic accountant must ensure that they are fully separated from all involved,
and in no way related to or tied to any party. It is important that the forensic accountant uses
due diligence when assessing the losses, interviewing witnesses in preparation for testimony,
and when conducting research. Using his or her own judgement, knowledge, prior
experiences, and skepticism, the forensic accountant can ensure the required skills. Collecting
information and evidence both legally and in the correct manner will ensure the report
contains true and pertinent information.
A forensic accountant is hired to provide a valuation for losses and serve as an expert witness
in court to support the findings. Forensic accountants are expected to allow room for the
process to be identified, explained, and verify the financial data when they are valuing a
business. The forensic accountant is to process and determine the economic value of the
business. A forensic accountant would demonstrate professional care, objectivity, and
integrity in performance of the engagement by speaking professional, in an authoritative
manner and with confidence, by dressing and acting professional. The forensic accountant
can demonstrate integrity by telling the truth and not taking any one side. Sometimes when I
watch police officer shows and I see the detectives testifying it appears that they take a side,
and they alter their comments. They still tell the truth but they bend the truth a little bit. The
forensic accountant can demonstrate their integrity by making sure that they tell the truth and
not try to take sides. Going along with their gut instincts and keeping their morals and values.
The forensic accountant will be impacted in the ability to obtain sufficient evidence or data to
support his or her opinion by researching the evidence and testifying about it truthfully.
Making sure that all the evidence is collected accurately and bagged properly. Being
professional will also help with the outlook of testifying. “Forensic accounting is commonly
associated with criminal investigations and other legal proceedings. After all, it was forensic
accountant Frank Wilson who uncovered evidence that helped bring down Al Capone for tax
evasion. And the “forensic” part of “forensic accounting” does signify the application of
scientific methods and analytical techniques in a manner suitable for use in a court of law”
(Shapiro, 2015). d
REFERENCES
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Rufus, R., Miller, L., Hahn, W. d (2014/12/18). Forensic Accounting. [[VitalSource Bookshelf
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Professional responsibilities. (2014). Retrieved February 8, 2023, from
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Rufus, R. J., Miller, L. S., & Hahn, W. (2015). Forensic accounting. Boston, MA: Pearson.
AICPA. (2013, June 1). Code of Professional Conduct a Bylaws
AICPA. (2013, June 1). Code of Professional Conduct and Bylaws.
https://us.aicpa.org/content/dam/aicpa/research/standards/codeofconduct/downloadabledocu
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Rufus, R.J., Miller, L. S., & Hahn, W. (2015). Forensic Accounting. Pearson Education.
Hamdan, M. W. (2019). The role of forensic accounting in discovering financial fraud.
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Jain, D. E., & Lamba, J. (2020). Forensic accounting: A way to fight, deter and detect fraud.
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