As a forensic accountant one must consider several factors when considering an engagement.
Some of those factors include competence, professional care, objectivity, and integrity of the
client and the individual’s ability to best serve the client (Rufus, Miller, & Hahn, 2015). d As a
result, the forensic accountant would need to review the case background, client’s history,
understand what expertise is required to ensure he or she is knowledgeable in the scope of the
case, and understand all the parameters of the case. Such as whether the engagement involves
family, civil, criminal, state, interstate, or federal court which can dictate the form of
testimony that would be required. Whether the engagement would require a written opinion
or a court appearance. d Plus, determine if conflicts of interest exist in actual or perceived form
to preserve the expert opinion because if a conflict exists then outcome of the engagement
could be damaged if not acknowledge and addressed prior to the engagement. This would
require professional care and due diligence to ensure objectivity and integrity are upheld.
Finally, if the engagement is acceptable then compensation fees and a schedule of
engagement will need to be considered.
For this case I would think that I would reject the engagement because of the attorney’s
reputation which seems to be a “win at all cost” attitude has the potential to cause a conflict of
interest and compromised integrity and objectivity. As a result, the case could most likely
result in pressure to provide expert testimony to fit the case instead of following the facts.
Which would lead to bias results and has the potential to miss court deadlines due to the
attorney’s slow responses. In addition, the attorney is slow to pay which may result in no
payment for services provided even though the attorney is paid upfront. Therefore, this
engagement shows many red flags in a “bad” engagement (Rufus et al, 2015). d Meanwhile, in
my opinion, this engagement could compromise a forensic accountant’s reputation and ethical
standards.
There are numerous pieces of the puzzle to analyse when trying to determine whether or not
to accept a new client engagement. I feel the most important step in practicing due diligence
is to take the time to thoroughly evaluate those involved, their environment, and history.
Doing so will help to protect yourself, the firm, and the public.
If I were considering taking on this lawyer as a new client, I would check their level of
integrity by talking to current employees, past CPA firms, as well as collecting feedback from
prior/current customers of the potential client. This would help to give an unbiased and honest
feel for what the client is about. Looking at this factor alone I would tread lightly with
Attorney Joe due to his history of not practicing what he is preaching or making good on his
word. Seems he is in it just for his own benefit.
From here I would speak to prior CPA firms for their opinion/experiences with the client.
Lastly if I did not find I could be of help but was still a little uneasy you should always write
of a contract outlining the engagement which is a legally binding document.
In conclusion, due to the numerous red flags present right from the start I would decline the
engagement request for an expert witness.
The first item that would have to address in this instance, is if Attorney Joseph Leslie has any
conflicts of interests with the client for which he has accepted the engagement. Is he mainly
accepting this engagement because he has an expectation of getting paid by his client up-
front?
The next thing that I would be sure to do is draw up an engagement letter that clearly defines
my expectations in this case, my expected fees and the timeline for them. The fact that he has
a reputation for rushing his staff to deliver quick results is a big red flag (Rufus, i.e., 2014), If
he agrees to my fees, there is a clearly defined understanding of my expectations, and proper
care has been utilized to set-up reasonable expectations to deliver my findings, I would most
likely accept the engagement contingent on a mutually agreed upon engagement letter. d There
are two things that would make this an engagement that I would not accept, vague
expectations of my work and any potential conflicts of interest.
The factors I would consider in deciding to accept the engagement are:
The character of the client – I want to make sure that the client has great communication
skills, shows respect, is responsive, and provides payments timely. I do not want my
reputation sacrificed in any engagement.
Whether conflicts of interest exist - If one exists, it must be disclosed to the client before I
accept the engagement. d I should be objective and be independent in fact and appearance.
Competence and due care – I must make sure that I have the skills and the resources to
complete the engagement. I also want to make sure the case timeline works with my schedule.
Nature and scope of the assignment – I should make sure I understand what is being asked of
me. I also should ensure that I have the availability, accessibility to witnesses and understand
the travel requirements.
Compensation – I want to understand how much I will be paid, when I will be paid and who
will pay me. I should accept a retainer from the client before I begin work.
I would not accept the case with Attorney Joseph Leslie. He is considered a bad client. He
expects a quick turnaround of information from his staff. d He also requires them to work long
hours. Although I am not his staff, he may require the same from me. I may not be able to
provide a good service if I am under pressure to deliver. I would not want to rush my work
and provide shoddy information. This could tarnish my reputation. Mr. Leslie does not pay
his consultants and experts on time. This is another red flag of a bad client. He can pay on
time because he only accepts wealthy clients who pays upfront. These are the reasons why I
would not accept the case.
There are several factors one should consider before taking accepting a client engagement
such as independence, client integrity, risk assessment and reasonable assurance. If a client's
reputation is well known for dishonesty, I could not, in good conscience, take on said client if
I did not believe they could be trusted. For Attorney Joseph Leslie, his lack of care to pay
those who do work for him on time is cheap, dishonest, lazy and arrogant. They only way I
would accept this case if if he paid me in advance, 100%, but even so, I could never fully trust
him. d At the end of the day, we are all here to do a job, whether good or bad, and the end goal
is to be paid. That is our livelihood that is being played with and I for one would never put
myself in a situation where my hard work is done for free.
The expert witness’ responsibility is to provide a level of competence provided by education,
experience, and adequate judgement. Additionally, they should also remain focused on
integrity, maintain client confidentiality, and independence (Robert Rufus, Laura Miller,
William Hahn, 2014).
Prior to accepting the engagement, the expert witness should meet with the client to perform
an evaluation of the client. d Follow up with prior engagement relationships to understand why
they are no longer working with Attorney Leslie and if there were any problems that
dissolved the relationship. It is ultimately sound practice to obtain as much information on
the client prior to signing on (Deborah K Rood, 2013).
I would not accept the engagement. The probability of an undue influence threat appears to
be possible as the client is demanding and has a high expectation of his consultants and
experts through the working of long hours and the provision of information quickly. This is
demanded, but he himself does not follow suit. Additionally, there is also the possibility of
financial self-interest threat as the client only takes on wealthy clients who pay up front but
does not pay his consultants and experts on time (AICPA, 2014). d d
Without discussing AICPA's Code of Professional Conduct, I can assure you, under no
circumstances would I ever work with an Attorney such as Joseph Leslie or anyone with no
moral compass. Undoubtedly, I will never work to help or defend white-collar criminals or
corrupt authorities. First, the scenario eludes Leslie only works with clients who are not only
wealthy, but also very likely greedy and guilty! As forensic accountants, we should be able to
read between the lines of a scenario such as this.
Forensic accountants must be thoughtful and cautious when accepting clients and consider a
potential conflict of interest before accepting an engagement. While a forensic accountant
may choose to work with criminals and criminal defense lawyers, there is no clear guidance
for this type of engagement except adherence to the AICPA Code of Professional Conduct
and personal and professional integrity. (Prendergast, n.d.)
In addition to conflict of interest, accepting an engagement should include adhering to
guidelines of independence and objectivity, professional experience, and credentials.
Moreover, the integrity of the client should also be analyzed and considered, including the
ability to pay for professional services. (Prendergast, n.d.).
Accepting a client engagement, including work for a lawyer, should entail an engagement
letter encompassing the scope of services, payment terms, and a retainer. While an
engagement letter is considered a contract or legal contract, an accountant should remain
aware and diligent regarding the integrity of the job or services. (Prendergast, n.d.).
According to Deborah K. Rood, author of: Is this client the right fit for your firm? For the
Journal of Accountancy, evaluating a prospective client is essential, especially for high-risk
engagements, and suggests the following:
Personally meet with prospective clients
Ask for and follow up with references, including attorneys, bankers, business consultants, and
major vendors or customers.
For key executives of business clients, ask for and follow up with personal references,
including previous employers and business associates.
Consider obtaining a credit history for individual tax and financial planning clients.
If the prospective client is changing CPA firms, request permission to contact the predecessor
firm to investigate issues such as the client's consideration of advice provided, integrity,
ethics, reasonableness of expectations, experience and qualifications of the staff, and business
policies and procedures including cooperation, timing of the engagement, and whether the
client pays bills on time. The previous CPA firm can provide only limited information unless
it obtains an Internal Revenue Code Sec. 7216 disclosure statement from the client. Even so,
the prospective client's reaction to this request (and the predecessor firm's response) may
indicate the client's relationship with professional service providers.
Determine how the prospective client found the CPA firm. A referral from a long-term client
may require a different degree of professional skepticism than someone who found the firm
over the internet. (Rood, 2013)
While the AICPA's Principles of the Code of Professional Conduct express the profession's
recognition of its responsibilities to the public, clients, and colleagues, I think an accountant
should not forget to protect themselves and their professional integrity. ET Section 54 Article
III—Integrity describes a member who should test decisions by asking: "Am I doing what a
person of integrity would do? (AICPA, n.d.) Even though we already covered integrity, I think
it's relevant in accepting an engagement or not. (AICPA, n.d.) ET Section 57 Article VI—
Scope and Nature of Services describes the main essential principals, as previously described:
Integrity, objectivity and independence, and due care encompassing competence and
diligence.
References
Code of professional conduct. (n.d.). Retrieved February 17, 2023, from
https://us.aicpa.org/content/dam/aicpa/research/standards/codeofconduct/downloadabledocu
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Deborah K. Rood, C. (2013, July 1). Is this client the right fit for your firm? Journal of
Accountancy. Retrieved February 16, 2023, from
https://www.journalofaccountancy.com/issues/2013/jul/20137770.html
Prendergast, K. (n.d.). Client acceptance procedures best practices among accounting firms.
Retrieved from http://www.researchassociatesinc.com/documents/BestPracticesClient.aspx
AICPA. (2014, December). 2014 Code of Professional Conduct. Retrieved from AICPA:
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Rufus, R., Miller, L., & Hahn, W. (2014). Forensic Accounting. Pearson Education (US).
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AICPA. (2016, Dec.15). Code of Professional Conduct and Bylaws.
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