When a client requests an oral report instead of a written report, the forensic accountant should take
precautions, as this could put the accountant at risk. The accountant should analyze the client’s
motivation for an oral request, such as whether it is cost-related or for confidentiality (Rufus, Miller,
& Hahn, 2014). Furthermore, the oral report can be misconstrued by the recipient, and the accountant
is left to prove what he or she meant to say. Without written documentation, there is no full-proof way
to prove the conversation took place. The forensic accountant can mitigate this risk by preparing a
written prereport outline with a memo-to-file to document the substance of the oral report (Rufus,
Miller, & Hahn, 2014). Accountants often give oral advice in response to client questions for general
inquiries or specific business discussions (Wolfe & Ference, 2013). An example of when a client may
ask for an oral report would be asking which states levy individual income taxes (Wolfe & Ference,
2013). Another example may be legal counsel does not yet want a discoverable report in the file (The
Fraud Files Blog, 2018). Accountants should be comfortable in presenting evidence in an oral or
written manner.
An oral report is defined as "a report presented in verbal form with no written documentation." (Rufus
et al., 2014) An example of a situation where an oral report may be requested is when providing
testimony in court. There are some cons to giving an oral report over a written report. One con is that
the recipient of the information may misunderstand what the accountant is saying. This can lead to
people relaying information that is false due to the misunderstanding of what was being said. When
giving oral reports, it is important to have a pre-report outline and a memo to file, which contains the
context of the oral report. Before giving an oral report, it is important to understand why the oral
report is being requested so that the accountant isn’t put in a risky situation. If the accountant doesn’t
feel comfortable giving an oral report or believes the reasons for the request are for suspicious reasons,
it’s best for the accountant to find an alternative option.
Oral presentations are very important for forensic accountants. z There will be many times where your
discussions and meetings are held face to face during the course of an engagement. Verbal skills
become an important asset as you must be able to clearly express and explain important findings,
requests, and reports. When a client as for an oral report, you must consider the risks involved in doing
so such as the lack of back up documentation and the potential for the client to misunderstand the
information being given. One situation where an oral report would be given instead of a written one
would be in the examination and testimony of a witness while in mitigation or in court. The saving
grace for the oral reports is that there is usually a stenographer who records the entire conversation so
that anyone can refer back to what was said as factual.
Oral reports are provided to the client when they are requested. There are usually discussions or
updates before the final report with the client and or attorney. During these conversations, the client
may provide further insight into what specific information the client is looking for. Several risks
associated with an oral report are a misinterpretation of the information provided where the client may
have selective hearing or memory, or in cases where there may be litigation, a jury may believe there
was not a full investigation, allowing opportunity to leave out or hide information. z If a client were to
request an oral report, I would want to make sure the client speaks to their attorney prior to their final
decision. Regardless I would provide a summary of what was discussed touching upon the major
factors of the oral report. The work I did would be the same regardless of the type report provided,
therefore leaving detailed information on the work I’ve completed and how I came to the conclusions.
This will help should I need to refer back to the documentation later. z (Rosenberg, 2010)
According to the textbook, some important notes about oral reports are:
• "The presenter must understand that speech differs from writing in both function and style.
• The length of an oral report is generally short (15–30 min.).
• z The focus of an oral report is usually the results (findings), which are presented concurrently with
analysis and discussion.
• The presenter is responsible for selecting the necessary information to be communicated and
ensuring that it is relayed successfully." (Rufus et al., 2014)
Both good and bad reasons why a client can request a verbal report from the investigator. For example,
our manager requests us to give a verbal report about any project we are working on at different steps
during the project. This is to make sure that we are going in the right direction or understand what is
being asked of us before we invest too much time in the project. We have a new member of our team
that didn't understand what was being asked of him. When he reported at the end of the day what he
had found, our manager was able to direct him in a different direction. This may be needed forensic
accounting investigations as the client may need to point out a direction to focus on (Rosenberg, 2010).
The client may ask for an oral report to ensure that progress is being made on their project also. This
could be a time when a lawyer may be able to provide directions to look that the investigator had not
thought of as well. While eliminating information from a written report is never a good idea, there
may be analysis that need included in the report that is not already there (Rosenberg, 2010). If the
forensic accountant is missing a vital piece of information, this may be found during an oral review of
the report.
There is also the chance that the client is concerned with what has been discovered. In requesting an
oral report, they may find that the forensic accountant is not finding the information that they had
wanted and may end the project. They also may find that the forensic accountant was able to uncover
their fraud and want to prepare for what may happen.
A forensic accountant can be asked in many cases to present an oral report. z However, this comes with
a great deal of liability for the forensic accountant. This is due to several pitfalls such as
misunderstandings, misrepresentations, and the fact that there is no documentation confirming or
denying the oral report. A client can request an oral report for any engagement depending on their
needs and requirements. z This could be the case when a client is concerned about discovery in a legal
case, criminal or civil (Driskell III, 2019). z If there is no written report, then no report can be produced
or used against the client. However, it is advisable in each oral report that a forensic accountant
prepare a written pre-report outline prior to the oral report and then after the oral report a memo-to-file
documenting the substance of the oral report to the client (Rufus, Miller, & Hahn, 2015). This
additional documentation can provide protection for the forensic accountant from misunderstanding or
misrepresentation, either intentional or not.
Clients may claim reliance on oral advice they allege erroneously or claim advice was not given at all
which can result in legal ramifications and reputation implications for the forensic accountant. This
oral advice could be in response to a client question and therefore forensic accountants must use
professional skepticism and knowledge in any engagement no matter how small or big it may seem.
One way to accomplish this is by maintaining working papers that include the date, facts provided,
advice provided, relevant accounting and tax considerations, the appropriate disclaimers, notice that
no legal advice was provided, and items for client to follow-up (Wolfe & Ference, 2013). It is
important to understand that oral communication is part of an engagement and one can not always
know how the receiving party is going to take the information provided so it imperative to protect
oneself and provide the intent in the form of a follow-up documentation, wanted or not. z If not wanted
then the underlying intent should be considered.
References:
Driskell III, F. D., CPA. (2019, Autumn). Conducting forensic accounting and internal investigations.
Retrieved March 29, 2023, from https://willamette.com/insights_journal/19/autumn_2019_1.pdf
Rufus, R. J., Miller, L. S., & Hahn, W. (2015). Forensic accounting. Boston, MA: Pearson.
Wolfe, J., & Ference, S. B., CPA. (2013, October 01). Write it down: The importance of documenting
oral advice. Retrieved March 29, 2023, from
https://www.journalofaccountancy.com/issues/2013/oct/20138366.html
Rosenberg, J. (July 2010). Written Report? Oral Report? What's an Investigator To Do? Retrieved
http://judithrosenberg.com/articles/caowi_1_3.html
Rosenberg, J. A. (2010, July 3). WRITTEN REPORT? ORAL REPORT? WHAT'S AN
INVESTIGATOR TO DO? Retrieved from California Association of Workplace Investigators:
http://judithrosenberg.com/articles/caowi_1_3.html
Rufus, R., Miller, L., & Hahn, W. (2014). Forensic Accounting. Pearson Education.
The Fraud Files Blog. (2018, June 12). The Fraud Investigation Report. Retrieved from The Fraud
Files Blog: https://www.sequenceinc.com/fraudfiles/2018/06/the-fraud-investigation-report/
Wolfe, J., & Ference, S. B. (2013, October 1). Write it down: The importance of documenting oral
advice. Retrieved from Journal of Accountancy:
https://www.journalofaccountancy.com/issues/2013/oct/20138366.html
Rufus, R., Miller, L., & Hahn, W. (2014). Forensic accounting. Upper Saddle River, NJ: Pearson
Education.
