Accountants play a key role in litigation by providing a range of specialized services that can support the legal process. Their expertise in financial matters allows them to offer insights and evidence that can significantly influence the outcome of a case. Here are several ways accountants can assist in litigation.
Calculating damages: Accountants can determine economic damages in a wide variety of contexts. Examples include cases involving breach of contract, patent disputes, tortious interference with business relationships, personal injury, wrongful death, employment discrimination and wrongful termination.
Business valuation: The value of a business may be at issue in cases involving mergers and acquisitions, shareholder disputes, property insurance claims and others. Accountants can provide accurate valuations.
Document review and management: Accountants can assist in reviewing and managing large volumes of financial documents, identifying key pieces of evidence and organizing information for legal teams.
Regulatory compliance: Accountants ensure that all financial reporting complies with relevant laws and regulations, which can be critical in regulatory disputes or government investigations.
Tax issues: Accountants provide expertise in tax-related matters, helping to resolve disputes with tax authorities or in cases where tax issues are a central component.
Forensic accounting: Accountants can investigate financial records to uncover fraud, embezzlement, or other financial misconduct. They analyze complex financial data to identify discrepancies and trace funds. Their skills are applicable in both criminal cases (e.g., Bernie Madoff) and civil cases (e.g., contested divorces, bankruptcy).
Internal investigations: In cases of suspected internal fraud or financial mismanagement that a company wishes to keep private, forensic accountants can conduct internal audits to uncover evidence and assess the extent of any wrongdoing or negligence. They can also advise companies on improving internal controls and corporate governance to prevent future issues.
Settlement negotiations and mediation: Accountants can help quantify financial aspects of settlements, ensuring that proposed settlements are fair and based on accurate financial data. During mediation, they can provide financial clarity that helps the parties reach an agreement.
Expert witness testimony: In most of the above areas, the accountant will provide expert testimony in court if the case goes to trial.
