Expert Accounting Evidence in Fraud Investigations
Fraud is a threat to the economy that will not go away. Worsening economical conditions can only highlight new problems all the time as businesses pull their belts in. If resources allow, these will need investigating and this means more work for the expert forensic accountants.
Frauds can be difficult to comprehend. The nature of a fraud is that it is hidden away until it is uncovered, often by chance. Criminal fraudsters are looking for ways to take in a way that will not be noticed. Or it might not be brought to light until they have moved on to another job. They seek means to carry out transactions that will be disguised within the accounting and business records of an organisation. Some frauds can go on unnoticed for many years and it is likely that many are never discovered.
Hiding frauds within the ledgers and day-books, or worse still within the computer records, means that the average person will not easily understand any anomalies that might be there. However, an accountant who is used to dealing with complex chains of numbers is better able to follow the audit trails of any missing money.
On discovery, a fraud will normally be investigated in order to prosecute the culprit - who will then be punished as an example to others. Complex frauds can be very difficult to prosecute because of the confusing nature of financial transactions. Generally courts do not understand the finer points of accounting that are being exploited by the fraudster.
An expert witness, who is an accountant, is essential for presenting complex fraudulent transactions in a way that can be understood by the lay person. They are much more than experts in accounting methods and practices - they must also be an expert in presenting the information. This can be in the form of a report but they must also be able to answer cross examination by the barristers and judge.
The person carrying out the fraud investigation is often a police officer. These capable investigators are highly competent at chasing the financial information and obtaining supporting evidence through interviewing suspects and other witnesses. However, they are often not able to present the complex money trails in a report that the court readily understands. This is why in the more complex cases that a forensic accountant, who is an experienced expert witness in his field of fraudulent accounting practices, is often called upon to assist in the case.
By utilising such an expert early on in a fraud case, the forensic accountant is able to contribute to the investigation process by focusing on the areas of accounting problems and avoiding wasted work following up every avenue that the police might think worth looking at. Then, when the matter comes to court, the expert witness has a deeper understanding of the fraud and is better placed to help both sides understand the factual financial evidence by presenting a sound opinion on its interpretation.
About the Author
Mark Jenner is a Fellow of the Institute of Chartered Accountants in England and Wales, a Certified Fraud Examiner and holds a Masters Degree in Fraud Investigation Management. He often acts as an expert witness in fraud cases. His web site offers articles and advice on all fraud matters at =>
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