In this scenario, the forensic accountant is hired to provide a valuation for losses and to
serve as an expert witness to support their findings. The forensic accountant has a
professional responsibility to perform this engagement in a certain type of way. The
guidance for such a performance is found under the AICPA’s Code of Professional
Conduct, ACFE’s Code of Professional Standards, and NACVA’s Professional Standards.
All of these have 6 common qualities that are important for the forensic accountant to
have. This includes integrity, objectivity, competence, due professional care, sufficient
data, and professional behavior (Rufus et al., 2014).
If the forensic accountant in this situation has the appropriate education, experience,
certifications, and training, then they will be better equipped to act with professional care
(Rufus et al., 2014). If they aren’t qualified, then they should not take on the engagement
because they wouldn’t be able to obtain sufficient evidence to support their opinion. They
must demonstrate professional care by getting a clear understanding of the scope and
objective of the engagement, be aware that there is a possibility of fraud, errors or conflict
of interest, and they must perform examinations/verifications to support their stance.
The forensic accountant would demonstrate objectivity by having no conflict of interest
with those involved in this situation. The accountant should evaluate their relationship
with anyone involved in the engagement. If, for example, they had a past relationship or
may have a future one with the client, then this may impair the accountant’s objectivity.
They may lean in favor of their client and would not have unbiased & reliable data to
support their opinion. Integrity can be demonstrated by leading with honesty,
trustworthiness and truthfulness.
All of these qualities are examined when the forensic accountant is under cross-
examination. The judge will bring up any conflict of interest, they will question the
accountant’s credentials/expertise and if, while under cross-examination, the accountant
isn’t consistent, then they may be lacking integrity. All of these qualities have a big impact
on the trustworthiness of the forensic accountant.
Reference
Rufus, R., Miller, L., & Hahn, W. (2014). Forensic accounting. Upper Saddle River, NJ:
Pearson Education.
