Identifying The Differences Between Preparing A Forensic Report For A Fraud And A Confiscation

Very often criminal cases need the expertise of a forensic accountant to assist. They analyse and present financial information in a way that a court can readily understand. Frequently their task is to assist the defence lawyers to respond to the allegations being made.

The prosecution often brings a case in a fraud matter such as a tax fraud or a confiscation of assets using the Proceeds of Crime Act legislation following another conviction that involves a large amount of financial data. It is usual for the case summary, or statement of information as it may be called in a confiscation, to be written and presented by persons such as an accredited financial investigator. These are often employed as police officers and may receive training in a number of areas including investigating, interviewing and evidence handling. Some will receive rudimentary accounting instruction but most will not. It is very rare for the prosecution to employ expert accountants to present financial data owing to budgetary constraints. However, this results in the need for the criminal defence to examine the allegations in very great detail as, more often than not, they will include errors and inappropriate conclusions.

In the case of a fraud, it will usually be clear that there is a case to answer. The police will investigate financial losses and in many cases be able to present a modus for the crime that can be readily understood. However, such is the partisan nature of the approach adopted by the regulatory authorities that they will often draw rather zealous or inappropriate conclusions from their evidence. The forensic accountant must consider all aspects of the case and present the information in an independent and unbiased way. Sometimes this can result in the defendant being shown in a more adverse light, but mostly will lead to a tempering of the prosecution's case.

On the other hand the treatment of a confiscation by the authorities can result in the presentation of wholly unreasonable demands for a person to lose all their wealth and suffer lengthy additional prison terms for committing even modest crimes for which they have already received a punishment. The confiscation regime has often been called draconian and presents a much stronger need for a capable forensic accountant to become involved.

The Proceeds of Crime Act 2002 ensured that criminals involved in not only money laundering and drug dealing were targeted, but also any criminal who could be deemed to have enjoyed a criminal lifestyle. Unfortunately, the criterion for a criminal lifestyle are very easily met!

The prosecution continue to use accredited financial investigators to estimate the extent of a person's criminal lifestyle, without the benefit of having to prove matters to within "reasonable doubt" as is usual for criminal matters. What is more, the legislation allows sweeping assumptions to be made, with the onus on the defendant to prove otherwise. This is why the defence is tasked with a difficult job and hence the need for the assistance of forensic accountants.

An expert may therefore be used to clarify the framework of a complex fraud, presenting the evidence in an understandable fashion. It can point to flaws in the allegations being made but can equally present a poorer picture for the defendant. More often than not, in a confiscation matter the expert accountant will reduce the extent that the criminal benefit has been estimated as by the prosecution, pointing out flaws in the approach and mistakes in the calculations.

In both frauds and confiscations there is a strong argument for an increased use of expert forensic accountants. This would mean increased funding for the police and prosecution authorities, but might mean a corresponding reduction in the amount of work that the defence is tasked with, which at the end of the day is also funded from public money.

Mark Jenner provides services as a forensic accountant based in York and throughout the UK. He is a Fellow of the Institute of Chartered Accountants and a Certified Fraud Examiner and has a Masters Degree in Fraud Management. He specialises as a criminal defence and tax fraud accountant.

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How To Set Up And Run Your Own Forensic Accounting Business

Many different types of financial professionals can fill the role of a forensic accountant. The attraction as a career path is that it can be more rewarding and interesting than mainstream accountancy. As with any business, there are pitfalls for the unwary who might jump straight in.

Before you even consider starting your own business you must determine whether or not self-employment is right for you. Many people cannot do without the support and mentoring offered by a conventional job, even (or probably especially) those at the most senior levels. Working for yourself can be lonely and the future is always uncertain. If the challenge of being your own boss outweighs the potential downside then you can look forward to an exciting and hopefully rewarding ride.

The next question to answer is whether or not you have the requisite experience and qualifications for forensic accountancy. A forensic accountant must be a competent accountant. Therefore, he or she will have some qualification as an accountant. Although some of the jobs of a forensic accountant will demand an "expert accountant", much of the work does not require complex and high level accounting skills or experience. Most of the work requires good numeracy and financial understanding, but more emphasis is on analytic skills, precision and a logical approach to puzzle solving.

In order to avoid mistakes, which could be costly to your clients and therefore costly to you and your new business, it is essential that you obtain some grounding in basic forensic accounting. This will mean that you must spend a couple of years working for an experienced forensic accountant to be able to understand the process and get an idea of the area of the business you might like to specialise in. Forensic accountants that serve the financial centres as opposed to local markets can afford to specialise, for example in matters of fraud. In this case learning the criminal procedures within the prosecuting and Crown court system is essential.

There are many that will say that you must be time served as a forensic accounting expert, ten years or more, before you are capable of presenting your own reports to the court. This may be right in some cases but there are still areas of work where the entrepreneurial beginner can cut his teeth on. These can include corporate investigating, looking for losses in companies or auditing fraud controls in large financial departments.

Once you are in a position where you are happy that you have the skills, experience and direction to proceed in, you need to decide where your work is going to come from. Working for others previously you are likely to start with a zero client base. Your work could come from victims of fraud, intermediaries such as lawyers or from regulators such as the police. You will need to ensure that you are visible to the relevant parties.

Nowadays, the best and most cost effective form of marketing is via your own web site. A professional looking web site that has been optimised for a range of relevant keywords is the strongest springboard a new business can have. Networking and advertising is all well and good, but can be expensive and very difficult to target properly. An appropriate web site is money well spent.

When the first job comes in, you must deal with it as if it is precious, which it is. In forensic accountancy you are only as good as your last job, so every one must be nurtured and one hundred and ten per cent of your input given. Going the extra mile means that you will gradually build a reputation that provides a regular source of work.

Finally, as your business builds up, it is good practice to keep your records up to date. You need records not only for tax purposes and billing your clients, but also to monitor your business properly so that appropriate changes can be made from time to time to maximise your income.

Mark Jenner provides services as a forensic accountant in London and throughout the UK. He is a Fellow of the Institute of Chartered Accountants and a Certified Fraud Examiner and has a Masters Degree in Fraud Management. He specialises as a criminal defence forensic accountant.

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