I have been performing forensic accounting services for clients since 1984. During that time, I have heard many definitions of “forensic accounting services” from other CPAs, seminar instructors, and attorneys. The American Institute of CPAs (“AICPA”) has a practice aid (“Practice Aid”) which gives the following definition of forensic accounting services:
“Forensic accounting services generally involve the application of specialized knowledge and investigative skills possessed by CPAs to collect, analyze, and evaluate evidential matter and to interpret and communicate findings in the courtroom, boardroom, or other legal or administrative venue. More simply, in a litigation context, the term forensic means to be suitable for use by a court of law.”
The Practice Aid states the following about the different types of forensic accounting services:
“Forensic accounting services include dispute resolution, litigation support, bankruptcy support, and fraud and special investigations, among many other services. Forensic accounting services utilize the practitioner’s specialized accounting, auditing, economic, tax, and other skills to perform a number of consulting activities. The provision of forensic accounting services often requires the practitioner to serve as an expert or fact witness, depending on the assignment.”
In a white paper published by the AICPA, the following key observations regarding forensic accountants were stated in the Executive Summary of the white paper:
- The authors surveyed and received responses from 126 attorneys, 603 CPAs and 50 accounting/auditing professors in June 2009 to better understand the current perceptions of what it means to be an effective forensic accountant.
- The survey found that 60% or more of the attorneys ranked being analytical, detailed-oriented and ethical as essential traits and characteristics. All three respondent groups agreed that being analytical was the most essential characteristic for the forensic accountant to possess.
- Despite common traits and characteristics identified by all three respondent groups, only attorneys ranked effective oral communication as their top core skill for forensic accountants and that was followed by the forensic accountant’s ability to simplify the information. Auditing skills were ranked fifth, in a top-five (“Top 5”) ranking, by the attorneys, and ranked second by the academics but were not ranked in the Top 5 by the CPAs.
- More than 80% of the attorney respondents identified inability to simplify the information and ineffective oral communication skills as the top-two reasons why forensic accountants are ineffective, which is consistent with their Top 5 ranking of core skills for forensic accountants. The CPAs, on the other hand, identified inability to identify key issues and lack of investigative intuitiveness as the most common reasons for a forensic accountant’s ineffectiveness.
As a testifying expert, I have found that demonstrating effective oral communication skills includes having the ability to teach in the courtroom. For example, the forensic accountant must have a knack for taking very complex financial data and explaining it to those listening – judge or jury, in a manner that they easily understand. If the testifying forensic accountant notices a jury member or two starting to doze off while they are speaking, this may not be a good sign that they are getting their message across.
By Don R. Bays CPA/ABV/CFF, CVA
 Practice Aid 10-1, Serving as an Expert Witness or Consultant; American Institute of Certified Public Accountants, Inc., 2010
 White paper: Characteristics and Skills of the Forensic Accountant; authors: Charles Davis, Ramona Farrell and Suzanne Ogilby; published by the AICPA FVS Section