Assuming the preemptive scenario for our discussion where a forensic accountant
is hired to provide a valuation for losses and serve as an expert witness in court, the
forensic accountant may first want to revisit all relevant sources, including Black's Law
definition of responsibility as "being held accountable for one's duty, action, inaction, or
obligation." (Rufus, Miller, Hahn, 2014)
Additional sources and references may be the AICPA's Code of Professional
Conduct and the ACFE Standards of Professional Conduct. Both emphasize integrity,
objectivity, professional competence, and due professional care encompassing diligence,
critical analysis, professional skepticism, and relevant and factual supporting evidence. In
addition, a forensic accountant must understand and document the engagement and client
communication and adhere to confidentiality. (Rufus, Miller, Hahn, 2014)
Moreover, the NACVA's Professional Standards encompasses ten principles and is
a significant source for forensic accountants regarding business valuation. The principles
constitute the same ethics or standards as AICPA and ACFE, surrounding trust, but also
describe criteria around serving the client interests, discreditable acts in the profession's
name, and conflict of business and financial interest. (Rufus, Miller, Hahn, 2014)
As presented in such a case, a forensic accountant or expert witness may seek
protection from a lawyer. (Singleton, 2010) In addition, to personal protection, it would
be wise to review the rules of evidence with the lawyer as well. The Rules of Evidence or
rules 702 and 703 in particular. Rule 702 presides over the admissibility of testimony by
an expert witness encompassing evidentiary criteria such as sufficient facts, data, reliable
principles and methods, and case-specific application. Rule 703 presides over the
information sources supporting the testimony of an expert witness, the rules of civil
procedure, exhibits, and the expert's CV requirements, including the history of sworn
testimony/cases and publications, plus a statement of compensation. (Rufus, Miller, Hahn,
2014)
b b b b b According to the AICPA Code of Professional Conduct, ethical problems arise
when an expert shows bias or loses sight of moral boundaries, their duty to the court and
the public, and overall "becomes an advocate for the client rather than an advocate for an
objective and independent opinion." (AICPA, n.d.)
b b b b b In closing, it's fair to say that a forensic accountant or expert witness' ability to
obtain sufficient evidence or data to support an opinion and testimony is inherent in
following the rules and principles of AICPA, ACFE, and NACVA encompassing
professional trust.
References:
Federal Evidence Review. Federal Rules Of Evidence (2015) | Federal Evidence Review.
(n.d.). Retrieved February 10, 2023, from
https://web.archive.org/web/20180831001530/http://federalevidence.com/rules-of-
evidence
Professional conduct Aicpa Code of. (n.d.). Retrieved February 10, 2023, from
https://us.aicpa.org/content/dam/aicpa/research/standards/codeofconduct/download
abledocuments/2014december15contentasof2016august31
b b b b b codeofconduct.pdf
Rufus, R., Miller, L., & Hahn, W. (2014). Forensic accounting. Upper Saddle River, NJ:
Pearson Education.
Singleton, T. W., & Singleton, A. J. (2010). Fraud auditing and forensic accounting (4th
ed.). Hoboken, NJ: John Wiley & Sons, Inc.
