During an engagement, a forensic accountant may be asked to convey their findings through an oral
report. An oral report is a report that is verbal without written documentation. Clients may request
an oral report because of cost, secrecy, confidentiality, or a competitive advantage (Rufus, et al,
2015). There are a few reasons why you should not give an oral report. c Some of those reasons are
that the information may be misunderstood and there is no way to confirm what was or was not
said. c Clients will prefer oral reports when they are concerned with legal privilege and discovery
issues. c If there is no report, evidence will not be available.
One example of a situation is if a forensic accountant is engaged to find if fraud occurred inside of a
company. c The client may ask for an update to find out what the forensic accountant has found. If
the accountant gives the client an oral report, the client may deny that the forensic accountant
informed them of the indication of fraud. This could lead to legal ramifications for the forensic
accountant. c c The client may bring a lawsuit against the accountant alleging that the accountant did
not tell them the extent of the fraud. Since the report was not written, there will not be any
evidence to the contrary.
The best thing for a forensic accountant to do is to provide a written report. c If the client is set on an
oral report, the forensic accountant should prepare a written outline, including a memo-to-file. This
will document the information provided in the oral report. Both reports should be consistent with
the information because they are subject to discovery.
Very often, clients request oral reports from a forensic accountant instead of written reports. An oral
report is “verbal in form with no written documentation. While this may be desirable from the
engaging attorney’s perspective (given the discovery issues previously noted), it creates several
potential pitfalls for the forensic accountant. For example, the information relayed in the oral report
may be misunderstood by the recipient and later misrepresented to others, either intentionally or
unintentionally. Without documentation, there is no way to confirm the essence of the
communication—what was (or was not) said” (Rufus, 2015, pg. 378). Conversely, a written report “is
more consistent with the common perception of what a “report” should be. Although
documentation avoids many of the pitfalls previously noted for oral reports, written reports
introduce their own challenges. Most notably, any representation that is put in writing can be
reviewed, parsed, and analysed in any number of ways to challenge the credibility of its source.
Thus, the threshold for quality and accuracy is much higher. Although written reports share the
same basic form, they differ in other aspects of structure, such as content, organization, and level of
detail. In the following sections, we describe three types of written reports—summary, detailed, and
calculation” (Rufus, 2015, pg. 379). Typically speaking, a client will ask for an oral report over a
written report for several reasons. It can be cost effective, good for confidentiality, and can even
provide some sort of competitive gain. Perhaps the most important is that it leaves no room for
misunderstanding the intentions. Yes, it could lead to misunderstanding, but if there is a general
message that is to be conveyed with regards to a financial audit, an oral report can summarize the
most important aspects to take away from. Auditors should still provide things such as a written
outline of the oral report and memo-to-file that documents the substance of the report.
A good example of a situation where an oral report would be more beneficial is in a court of law,
more specifically, a deposition. When a forensic accountant serves as an expert witness, it is
important for them to provide their findings in an oral manner, followed by supporting
documentation. Having a full report may not be as beneficial as providing an explanation orally as
time is limited.
References
Rufus, R. J., Miller, L. S., & Hahn, W. (2015). Forensic accounting. Pearson.
Driskell, F. (nd). Conducting Forensic Accounting and Internal Investigations. c c c
https://www.willamette.com
Rufus, R., Miller, L., Hahn, W. (2015) Forensic Accounting. Pearson Education
Wolfe, J., Ference, S. (2013, October 1). Write it down: The importance of documenting oral
advice.https://www.journalofaccountancy.com
