As with most professions, each client or matter presents varying challenges. Forensic accounting is no exception, and in fact often deals with a high number competing challenges. Certainly everyone involved are exposed to differing aspects and learn valuable lessons. Some of the challenges we encounter include:
- Being approached at the 11th hour to prepare a detailed report for use in proceedings;
- Lack of information – it can be quite difficult to extract information where the parties are in dispute and one party holds more of the information than the other. Especially, if investigating a fraud matter, the accused is not going to hand over the evidence on a platter;
- Fee sensitivity – this one is not unique. Most parties involved in litigation are highly emotional and when presented with the potential report costs from numerous experts are hesitant to recognise the value.
- Clear instructions can often be difficult to obtain and therefore necessary to be able to sort through the differing views of the various parties involved to determine what is actually trying to be achieved.
- Turnaround expectations can also be a challenge. Even when instructions are given well in advance, the expectations in relation to when we will be able to provide a meaningful report can be difficult to meet.
- Dealing with high emotions whilst trying to get the job done requires certain skills to work with the client and yet achieve the required result.
As a single expert in a family law matter I was faced with a number of these challenges.
The husband held the majority of the records in relation to the financial affairs. He was rather reluctant to provide the information requested and only provided part of what he had. It was only when the solicitor acting for the wife served subpoenas on both the husband and a third party who had purchased a business from the husband and wife did the full financial picture become clear. Originally it appeared straightforward that the business had been sold for a certain value. Records supplied via the subpoena revealed that work in progress at the time of the sale had been “reworked” and was subsequently being paid to the husband in the form of a retainer by the new entity. This had a material impact on the value of the business.
In this instance, fee sensitivity was not an issue. The wife had determined, at least in her own mind, that substantial funds from the business had been applied for the husband’s own benefit, particularly in courting his new spouse. Considerable time was spent in tracing this expenditure only to find that it was not as material as originally thought and had no real impact on the value of the matrimonial asset pool. One party was certainly highly emotional and therefore insensitive to what costs were incurred.
Timing was also an issue in this matter. Although I was engaged well in advance of when the report was required to be filed with the Court; the delay in receiving the information required meant that I had to file a report which was effectively “qualified”. Once the balance of the information was provided, a supplementary report was filed.
From this one file, I learned a number of valuable lessons.
Firstly, if it appears that not all of the information or documentation has been disclosed, it probably hasn’t. It is sometimes necessary to think outside the square and come up with another way to obtain the information. In this instance it was information provided by a third party as a result of subpoenas that provided the missing link.
At times it is not commercial to pursue every avenue of investigation right to the end, however if it is required for peace of mind, the client may want it done.