In the aftermath of accounting scandals, financial crimes, and business collapses, the rapidly growing specialty of forensic accounting continues to define itself. The need for forensic accountants (FAs) in government, industry, and public accounting continues to grow. There is also an incredible need within law firms for the specialized skills of FAs. Litigation often involves multiple, complex accounting and legal issues that overlap and intertwine. FAs with broad business backgrounds and forensic experience are a vital resource to the litigation team and provide valuable insight into financial issues.
“By having a forensic accountant within the firm, we are able to utilize her financial skills early on as we evaluate new matters. Time requirements for locating, interviewing, clearing conflicts, and scheduling meetings with outside experts are minimized,” said Jim Medford, litigation practice area leader for Smith Moore Leatherwood, a regional law firm with offices across the Southeast. “With a forensic accountant in-house, we can offer our clients more sophisticated services and cost savings in one stroke, and ultimately, that’s what they are looking to us to do.”
The skill sets of traditional accountants do not always transition well into forensic services where strong analytical thinking, as well as oral and written communication skills are essential. For FAs possessing these skills, a law firm can offer an exceptionally wide variety of both interesting and challenging work. By analyzing, interpreting, summarizing and presenting financial issues in an understandable format, FAs assist attorneys in identifying a case’s key issues.
As an agent of the law firm, internal FAs are not required to testify or to issue expert reports to the opposing side about their findings. They may communicate freely with attorneys as these communications are not discoverable by the opponents. When outside financial experts are needed for testimony, internal FAs assist in finding experts with the requisite skills and experience. The FA may also assist in preparing experts for trial. In investigating the financial facts of a case, much of the information needed by the outside expert will already have been obtained, organized and summarized by the internal FA.
The law firm-accountant relationship has the potential to grow and can be mutually beneficial as firms realize the benefits of having an internal FA and accountants seek creative ways to use their skills and experience. Working with a law firm as a consulting or testifying expert provides opportunity for the accountant to develop relationships within the firm, to understand the firm’s culture and to find ways that he or she could benefit the firm. An internal FA can be a powerful resource for law firms of all sizes, but the FA must persistently demonstrate this exceptional value.
Skilled examiners seeking employment in a law firm need a broad CPA background; knowledge of accounting principles and applications; auditing and tax. A number of organizations offer specialized forensic training and certifications. The Forensic and Valuation Services section of the AICPA (American Institute of Certified Public Accountants) introduced the CFF (Certified in Financial Forensics) in May 2008. This certification requires that members be licensed as CPAs, pass an examination, have forensic services experience and maintain continuing education requirements.
Tina Harris is an internal forensic accountant at Smith Moore Leatherwood LLP, and a member of AICPA Forensic & Valuation Services Section.
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