Types of Forensic Expertise
There is much crossover among disciplines in the performance of forensic expert work. Practitioners may have educational backgrounds in economics, finance or accounting. However, it is the knowledge, training and experience of the forensic expert that is key in calculating economic damages, and not a specific degree.
Forensic economics is the scientific discipline that applies economic theories and methods to the issue of pecuniary damages as specified by case law and legislative codes. Topics within forensic economics include (1) the analysis of claims involving persons, workers, firms, or markets for evidence concerning damage liability; (2) the calculation of economic damages in personal and commercial litigation; and, (3) the development and use of generally accepted forensic economic methodologies and principles. [Definition adopted by National Association of Forensic Economics Board of Directors, 8/1/2002]. Graduate work in economics typically includes classes in statistics, mathematics, econometrics, theory of the firm, labor theory and advanced courses in microeconomics and macroeconomics.
Forensic Accounting is a very general term. It can be and is often used to describe a wide range of functions or tasks utilized by Certified Public Accounts or other finance and accounting professionals, such as MBAs.
With regard to the legal arena, forensic accounting often refers to the process whereby a forensic accountant utilizes investigative accounting skills to identify data and information relevant to the calculation of various forms of economic damages including lost profits, business destruction, partnership/ownership disputes, etc.
Likewise, training in finance can also provide a forensic expert with the tools necessary to provide a thorough analysis of a damages claim, especially in matters involving commercial damages, stocks, intellectual property, insurance claims, business valuation, banking and real estate matters. Business and finance training, coupled with broad real-world experience, can provide key insights into complex litigation.
The skilled forensic accountant or economist will be well prepared to explain his procedures and opinions in a clear, cogent manner, thereby assisting a trier-of-fact in making an informed decision.