The word “forensic” means of or used in connection with courts of law, and forensic accountancy is the application of accountancy knowledge to legal problems.

It has been a long established principle that the courts can call for opinion evidence from experts as well as evidence from witnesses of fact. One of the roles of forensic accountants is, therefore, to assist the courts or other legal tribunals with understanding the accountancy issues in disputes and providing expert opinion on such matters.

Expert accountants not only have to have a detailed knowledge of accountancy. They must also be able to express their opinions clearly in written reports and be willing for those opinions to be tested under cross examination in court.

The other main role of forensic accountants is to investigate fraud and financial irregularity. This may again lead to the production of reports required for legal cases, whether civil or criminal. But another purpose can be to help identify the extent of any misappropriation of property and assets that may be recovered. Often systems failure has lead to the fraud, and forensic accountants provide reports that seek to identify systems weaknesses and recommendations on how to make improvements.

In the 21st century forensic accountants now find themselves acting in a range of cases on a selection of matters, including:

• Valuing unquoted businesses or shares in shareholder disputes or matrimonial cases;
• Determining the amount of assets or earn outs due under the terms of business sale and purchase agreements;
• Quantifying loss of earnings in personal injury cases, or loss of profits in commercial disputes
• Assisting clients reach a negotiated financial settlement at any stage during a dispute, especially at mediation
• Analysing books and records for evidence of financial irregularities where there are suspicions of fraud
• Assessing allegations of professional negligence or misconduct on the part of other accountants, auditors and tax advisors

The NIFA London Forensic Accounting group was formed in 2010 from experienced member firms in NIFA, to offer a dedicated service to the legal profession in London and to provide ready access to quality experts able to respond to your specific requirements.