INTHEBLACK July/August 2023 - Magazine - Page 20
F E AT U R E
“The best way to handle cross-examination is to have been intimately involved in preparing
the report, to know your report thoroughly, to answer the questions put to you as simply as
possible and to be completely independent of the client who engaged you.”
DEAN NEWLAN CPA, MCGRATHNICOL
and assumptions used in your report with
the aim of challenging the credibility of
your findings and opinions.
“The best way to handle cross‑examination
is to have been intimately involved in
preparing the report, to know your report
thoroughly, to answer the questions put
to you as simply as possible and to be
completely independent of the client who
engaged you.”
EXPERTS IN DEMAND
As the world of business grows increasingly
complex, expert witnesses are now busier
than ever.
Subject matter experts in forensic
accounting, business valuation and insolvency
may be called upon as expert witnesses in
post‑acquisition disputes, economic damages,
fraud and bankruptcy proceedings, and more.
While not all cases lead to formal litigation,
expert witnesses are still required to produce
reports suitable for court proceedings that
clearly explain complex information.
APES 215 Forensic Accounting Services sets
out mandatory requirements and guidance
for members who provide forensic accounting
services. This includes the obligations of
expert witnesses. First introduced in 2009,
the standard has been amended several times.
A review of APES 215, proposed by
the Accounting Professional and Ethical
Standards Board, is ongoing. The review
seeks to amend definitions and examples, and
address the impact of recent and emerging
technologies on forensic accounting services.
Elizabeth Giust FCPA, managing director
of Qualitas Consultants, has served as an
expert witness and assisted expert witnesses
in cases that involve class action.
Accountants providing expert witness
reports must have specialist knowledge in
the relevant area, says Giust, who is also
a member of CPA Australia’s External
Reporting Centre of Excellence.
“APES 215 outlines the requirements
of an expert witness, but what stands out
for me is that you have to have the most
incredible eye for detail, and you have to be
extremely professionally sceptical,” she says.
20 INTHEBLACK July/August 2023
“In most cases, you also need to have
a team to support you, as it is very difficult
for an expert witness to act alone, especially
in the bigger cases.
“You also need to make sure that you
are 100 per cent confident that you have
all the information you need to come to a
conclusion that you can support on the stand
if it gets to that point,” she explains.
“Part of the expert witness’s work is to
educate very intelligent legal teams about
complex financial matters. You need to be
able to communicate clearly.”
COMPLETE INDEPENDENCE
Expert witnesses are appointed by law firms
who act on behalf of a client, but Newlan
stresses that the role requires complete
independence.
“When it comes to commercial disputes,
there are two potential roles for a forensic
accountant,” he says. “One is acting as an
independent expert witness in the interests
of justice, where you are essentially there
to assist the court.
“The other is acting on behalf of a client
in a consulting role. If you are acting in an
expert witness role, you are not permitted
to advise the client.
“There may be a temptation to look after the
interests of the client, but you can only do that
by being fully independent,” Newlan explains.
“If someone tries to sway your opinion,
your independence may be put into question.
You must hold your ground or, ultimately, be
prepared to give up your fee and resign from
the engagement.”
Under the terms of APES 215, an expert
witness may express opinions based on
specialised knowledge derived from training,
study or experience on matters such as an
amount of damages to be awarded or the
amount of a claim under an insurance policy.
Business valuations or business
interruption cases also require accountants
to provide expert opinion. “A business
interruption claim, for example, where the
claimed conduct of a party has affected the
ability of a business to generate income,
requires true opinion evidence,” Newlan says.
