Skills of forensic accountants as expert witnesses and admissibility of expert testimony

  • Yousef Abuorabi

Western Sydney University thesis: Doctoral thesis

Abstract

The demand for accounting expert witness services has increased over the past decade, as has the diversity of areas that expert witnesses are required to cover. Consequently, many universities and colleges are currently considering adding forensic accounting courses to their curriculum (Wang et al. 2016, DiGabriele 2010). Identifying appropriate forensic accounting skills will aid both academia and professional bodies to integrate these skills into their accounting curriculum (Bhasin 2016). This will help accounting students of tertiary institutions and professional bodies gain appropriate forensic accounting skills and techniques (Seda & Kramer 2015). Accounting expert witnesses are called to testify in cases related to accounting or financial matters, such as fraud cases, that are beyond the knowledge or understanding of judges and jurors. Their expert testimony is provided as opinion evidence based on the expert's training, study or experience. Accordingly, forensic accountants (FAs) should acquire skills that enable them to perform their duties as expert witnesses effectively (DiGabriele & Huber 2015; Heitger & Heitger 2008). Analysing the existing literature has revealed a lack of studies focusing on the skills that FAs require, specifically on litigation support services in the context of Australia (Bhasin 2016; van Akkeren & Tarr 2014). Therefore, the present study attempts to fill a knowledge gap and contribute to the development of this professional niche in Australia and the other countries. This study aims to investigate the main skills that FAs should possess to act as expert witnesses in courts from the perception of three stakeholder groups: lawyers, professional accountants and accounting academics. Additionally, this study inspects the factors affecting the admissibility of expert testimony. Further, it inspects the variance in the perceptions of the above three groups regarding the skills required for expert witnesses. Moreover, the research project explores the essential requirements that are required for FAs to practice expert witnessing and litigation support services before the court in the Australian context including level of education, area of specialisation, forensic accounting credentials, the career pathway of accounting expert witnesses and computer-based forensic techniques. Institutional theory and agency theory are adopted to underpin and explain the objectives of the study. From an institutional perspective, identifying the skills, ethics and other requirements that FAs should possess to act as expert witnesses will improve their work and assist the efforts to standardise forensic accounting as a profession in Australia. This will reduce the institutional pressures on forensic accounting and meet the expectations of those who use these services, thus legitimising and improving the industry. On the other hand, from an agency perspective, improving the skills of FAs will reduce the conflict between the principal (users of FAs services) and the agent (FAs), which thus reduces agency costs by aligning the objectives of principal and agent. The study is a descriptive design utilising a mixed-methods approach with quantitative and qualitative elements. A literature review was conducted to identify the basic skills of accounting expert witnesses, which led to developing a literature-based list of forensic accounting skills (LFAS). The list contains six sets of skills in forensic accounting. A set of hypotheses was formulated and tested by using data collected from a questionnaire and interview survey. The questionnaire was distributed by email using the online survey distribution tool, Survey Monkey, and the interviews were conducted by phone. Data collected from these two techniques were analysed using statistical analysis software, including Excel, the statistical package for social science (SPSS), analysis of variance (ANOVA) and NVivo. The findings from the questionnaire and interviews were used to test and validate the LFAS. The results indicated that the participants agreed on the importance of numerous skills that FAs should possess to practice expert witness services, such as communication skills, auditing skills, investigative flexibility, legal knowledge, ability to simplify information and professional independence. In contrast, the respondents disagreed on the importance of other skills, such as knowledge and understanding of criminology, management, family law knowledge, confidence, a creative mindset and public interest. In the interviews, participants also highlighted the importance of new skills that were not previously addressed by relevant studies or the questionnaires' results, such as attention to detail, computer skills, critical thinking and valuation skills. Study results also revealed the factors that can affect the admissibility of accounting expert witnesses from the participants' perspectives. One important result is the objectivity of the expert. A second important result is the view that the experts must comply with the court rules and code of conduct for accounting expert witnesses. A third result was that the experts'evidence must be based on their study, training and experience and that the report evidence submitted to the Court must be relevant, reliable and within the scope of tasks assigned to the experts. Finally, results revealed the belief that the expert's opinion should be supported by facts and that expert witnesses should demonstrate the methods and documents used to prove these facts. The findings also identified the main requirements for FAs to act as expert witnesses from the perspective of major stakeholders, including that the master's degree was considered the appropriate level of education for FAs; that law was selected as the preferred discipline for FAs, along with a degree in accounting; that CPA or CA was chosen as the best credentials for expert witnesses in accounting; that obtaining a degree in accounting with practical experience in a related field was the best path for commencing a career as a FA expert; and that special computer skills in forensic and investigation packages were deemed critical for FAs.
Date of Award2019
Original languageEnglish

Keywords

  • forensic accounting
  • evidence
  • expert
  • Australia

Cite this

'