After many of my presentations, it’s not uncommon to be asked if I deal with homicide cases and dead people. After all, when glitzy television shows such as CSI and American Greed glamorize high-tech criminal forensics, it’s not unrealistic to think that working as a forensic CPA is non-stop, edge-of-your-seat excitement. While money is a motivating factor in many homicide cases, those cases are truly the exception. While larger forensic cases usually result in criminal charges, most of our work in civil cases is performed without the glitz seen on television.
Don’t get me wrong, I am passionate about my chosen field of work, whether the case is criminal or civil. However, many times my career choice is often misunderstood. Forensic accounting can be defined as investigating people and finances. I like to compare it to putting a puzzle together—a puzzle that is comprised of many small pieces that must be tediously assembled to get to the finished product. Forensic accounting is a work of art.
In a forensic case, these pieces are contained in boxes of source documents, general ledgers, cancelled checks, income tax returns, financial statements and a multitude of other accounting records. Document organization is paramount in managing a forensic engagement. Our largest forensic case – which resulted in a criminal conviction – took 18 months to complete. To the dismay of many clients whose perception of forensic work is distorted by what they see on television, forensic work can become tedious when we are looking for a needle in a haystack of records. And finding that needle can be time-consuming.
Nothing increases forensic professional fees quicker than incomplete and disorganized records. Yet, I am a firm believer that financial transactions can always be reconstructed; in times of intentionally destroyed records or altered payees in accounting software, reconstruction is mandatory. A forensic examiner cannot take anything for granted. Professional skepticism is in our DNA.
Aside from the often painstaking time investment in securing, organizing and examining voluminous paper records and electronic data, it is typically required that we draft work papers and then write a clear and logical expert report to convey these tasks and identify our conclusions. If parties cannot agree with the findings, the case proceeds to trial where the forensic expert will testify on his or her qualifications, methodology and independent conclusions. Testifying is the pinnacle of a forensic engagement.
In addition to being a Certified Public Accountant (CPA), it’s beneficial to possess the designations of a Certified Fraud Examiner (CFE) and Certified in Financial Forensics (CFF). A forensic CPA is customarily engaged by an attorney to address a case involving employee theft, fraudulent transfers, a lawsuit that involves an economic loss, or a business that has a disagreement over a complex financial transaction.
Our proactive forensic services are frequently retained by for-profit and not-for-profit businesses to assist them in identifying internal control weaknesses and provide recommendations for security enhancement. Finally, we frequently work hand-in-hand with attorneys and clients in domestic relations cases tracing and identifying pre-marital and marital assets, identifying potentially hidden assets and assisting with every other financial aspect of a divorce, including the independent calculation of disposable income and income tax ramifications associated with the division of assets.
Unlike television, most cases do not go to trial due to the cost of litigation. Usually, parties will settle the case. And while it can be exciting to be able to put all of the pieces of a financial puzzle together, it is a time-consuming task.
Unlike an attorney, a forensic CPA is not an advocate for the attorney’s client. Maintaining professional independence and objectivity is critical in not only upholding the ethics of a certified public accountant and certified fraud examiner, but more importantly in establishing credibility with a judge or jury.
After testifying in a very successful forensic case in Columbus, I’ll never forget riding down in an elevator with both parties and their respective attorneys to listen to the unhappy opposing party ponder aloud to his attorney, “We came to a gunfight, and our expert brought a stick.” Engaging a qualified and accredited forensic CPA can easily be the deciding factor in prevailing in litigation or going home on the short end of a verdict.
Frank A. Suponcic, CPA, CFE, CFF is a Partner in Skoda Minotti’s Litigation Support Advisory Group where he regularly assists clients with fraud assessments, forensic investigations, economic damage claims, commercial disputes, divorce, and labor relations.
He can be reached at (440) 449-6800 or via email at firstname.lastname@example.org.