As a forensic accountant, fraud investigator and expert witness, there is nothing more disheartening to have an investigation report, or part thereof, considered inadmissible.
Avoiding the intricacies of forensic accounting evidence is impossible and one of the many reasons why it is imperative that forensic accountants not only have a good understanding of the rules of evidence but apply these rules throughout their investigation.
The rules of evidence states, with few exceptions, “relevant evidence is admissible, irrelevant evidence is not.” Sounds logical but is not quite that simple as it requires a unique skill to know the difference between what a court may consider relevant or not. It is also further complicated depending on if it is a civil or criminal proceeding.
It is therefore important to note that regardless if evidence is factual or opinion the foundation rule governing the admissibility of evidence is that it must be relevant and reliable.
Too often forensic accounting reports include irrelevant and or unreliable evidence. Why? One explanation is the limited knowledge and training of forensic accountants on the rules of evidence.
Whilst a comprehensive understanding of the rules of evidence requires expert knowledge of the law, forensic accountants can benefit from a good understanding of the rules.
A further explanation is that most cases settle rather than litigated. Because of this, forensic accountants may be nonchalant about whether evidence will be admissible or not. This not only increases the risk of the investigators report being struck out by the court but could also impede the best possible settlement for the client.