A forensic accountant can be asked in many cases to present an oral report. a 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. This could be the case
when a client is concerned about discovery in a legal case, criminal or civil (Driskell III,
2019). a 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). a 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). a 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. 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
