When Should a Forensic Accountant be Engaged?
The popularity and demand for forensic accounting services continues to grow due largely to several well-publicized financial scandals over the past decade. Attorneys hire forensic accountants for a variety of matters, including suspected fraud, matrimonial investigations and shareholder disputes. However, the timing of when a forensic accountant is engaged may play a vital role in the outcome of a case.
When litigation revolves around facts that require the gathering and analysis of accounting data or the interpretation of complicated accounting issues, a forensic accountant should be retained. Hiring a forensic accountant as early as possible during the discovery period allows the forensic accountant to assist the attorney in a variety of ways, including making a preliminary determination as to whether litigating is financially worthwhile. The forensic accountant should be given the latitude to investigate all facets of the matter so as to arrive at the proper conclusion.
Once forensic accountants are engaged, especially at an early stage, they can be an invaluable asset in a case. For example, forensic accountants know from their training and experience what financial documents should be requested and what information these documents will likely contain. In addition, the forensic accountant can provide guidance as to what course of action to take and assess areas of vulnerability.
Although bringing in a forensic accountant early in a case is important, choosing the right one is equally vital. Careful attention should be given to the qualifications of the forensic accountant and the resources of the group engaged to perform these services.