In an engagement, the forensic accountant must communicate their
results and opinions in a report. Regardless of the format of the
report, whether it’s written or oral, it must be based on reliable facts
and data. Rufus et al. (2014) states that an oral report is verbal and
there is no written documentation. Although this format may be easy
and preferred by the engaging attorney, the information can be easily
misunderstood and misrepresented to other individuals later on
(Rufus et al., 2014). Because of the nature of oral reporting, it’s
important to consider the motivation behind a client requesting an
oral report. Motivation can vary, including confidentiality,
competitive advantage, secrecy, or cost (Rufus et al., 2014). By
understanding the reasons why a client wants an oral report, a
forensic accountant can protect themselves from potential risks. The
reason may be as innocent as the client wanting to save money. An
oral report can be done quickly compared to a written report which
may take more time for a forensic accountant to put together. Or it
could be that the client is hiding something. If the client is
intentionally being secretive about something and not wanting it
documented, then this is a red-flag and the forensic accountant may
not want to engage.
To avoid these types of risks, the forensic accountant should prepare
a pre-report outline and also a memo-to-file which documents the
oral report material (Rufus et al., 2014).
Reference
Rufus, R., Miller, L., & Hahn, W. (2014). Forensic accounting. Upper
Saddle River, NJ: Pearson Education.
