Exhibiting Integrity
Lessons for Litigation Professionals

by Chris Campos

As I reflect on my more than 40 years of practice, which has included what is now referred to as "forensic accounting," I am amused by the developments over the years. Note that I didn't say surprised. I am often asked by attorneys, either in a deposition or at trial, "Mr. Campos, would it surprise you if..." Regardless of how the question ends, I can honestly answer that nothing surprises me any more. (Not at my age!)

What amuses me is that attorneys expect the accounting expert to be an advocate for the party who hired them. Accountants often fall into the trap of making statements for which they have no support. These acts are a violation of our professional standards and Code of Ethics.

Bad Examples

While in a courtroom waiting to testify recently, I listened to an accountant testify that he had adjusted the amounts I had calculated as damages. When asked about his foundation for those adjustments, he testified that his client, the defendant in this case, had told him that certain amounts had not been paid.

The accountant prepared tax returns for the defendant's corporation and, therefore, had a relationship other than that of expert witness on the defendant's behalf. He based his actions on the statements of a party to the action, without any independent verification of those statements, such as examining books and records firsthand. My testimony centered on the lack of records that were available to the accountant to prepare tax returns but which were allegedly not available tor production.

In another case involving accounting malpractice, the accountant testified that he could not remember what audit procedures he followed several years earlier when questioned about his audit procedures. There were repeated questions along these lines and the answers remained the same. I was in the courtroom during his testimony.

When I testified, I said, feeling somewhat sympathetic for the accountant, "that if Mr. Smith had working papers, as required by the profession, he would not have to rely on his memory." My testimony was based on the pronouncements of the profession, which should be the basis for accountants' testimony and experts' reports in litigation.

Lessons Learned

In preparing to testify, it is important that the accountant be comfortable, from a professional point of view, with his or her proposed testimony. He or she also should be prepared for the possible questions that will invariably be asked in cross-examination.

Depending on the circumstances, I often have another attorney working on the case act as devil's advocate and pose questions that are likely to be asked during examination. This exercise can be very helpful in preparing the accountant for cross-examination. Direct examination is fairly easy; it is the cross-examination process that is difficult for an expert witness.

The most important factor in litigation work is to be honest and not to be an advocate—that's the attorney's job. As accountants, we are expected to exhibit integrity, objectivity, and independence in everything we do. This applies to litigation work as much as it does to audit work.

It's been my experience that in the overwhelming desire to get into the "lucrative" field of forensic accounting, some accountants will do and say anything. This is inappropriate and not in accordance with what our role should be.

Chris Campos, CPA, is a partner with Campos & Stratis in Teaneck, NJ. He is also a CPA/LSC Editorial Advisory Board member.

[Reprinted by permission from CPA Litigation Service Counselor, May 2000.]

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