Finding the Story in the Numbers: When to Call a Forensic Accounting Expert
Written by: Megan Ramey, CPA, CFF, ABV
Every case has a story. When that story is hidden in financial records, you need someone who can translate the numbers into a clear picture. Attorneys are experts in the law, but when the outcome of a case depends on business value, damages, or financial records, the numbers require a different kind of expertise. That is where a financial forensics and business valuation professional can make all the difference.
A common question I hear from attorneys is: When should I bring in an expert?
The truth is that the best time to involve a financial forensics expert is usually much earlier than expected. Delaying until closer to trial may limit the time available to complete the analysis. Early involvement allows us to shape discovery, highlight issues before they escalate, and align the financial analysis with your legal strategy.
Here are the most common moments in litigation when it is worth bringing in a financial forensics expert:
When the Value of a Business Is In Dispute
In divorce, shareholder disputes, or partnership dissolutions, determining what a business is worth is often the central question. Business financials, however, are rarely straightforward.
Owner compensation may not reflect market rates. Expenses labeled as “nonrecurring” can reappear every year. Personal expenses sometimes flow through company accounts. All of these factors distort the financial picture of a business.
A business valuation expert analyzes the records, makes appropriate adjustments, and delivers a defensible valuation opinion. The goal is not a rough estimate, but a clear, well-supported analysis that can stand up in negotiations, depositions, or the courtroom.
When Financial Records Do Not Add Up
Sometimes the numbers simply do not make sense. Bank accounts do not reconcile. Assets appear to be missing. A client’s lifestyle far exceeds what the tax returns suggest.
In these situations, forensic analysis is essential. By tracing funds, reviewing financial flows, and identifying inconsistencies, we uncover the story hidden in, or outside of, the records. This kind of work often provides clarity in divorce, fraud, and shareholder dispute cases; where incomplete or confusing financial records can leave attorneys at a disadvantage.
When Fraud or Misconduct Is Suspected
Fraud does not usually announce itself. Instead, it appears in patterns. Profit margins shift without explanation. Expenses increase in unusual ways. Sales spike or drop at suspicious times.
A forensic accounting expert knows how to uncover these patterns and document the evidence in a clear and concise way that supports litigation. Detecting fraud requires patience, attention to detail, and the ability to see connections in the numbers that may not be obvious at first glance.
When Damages Must Be Calculated
In cases involving breach of contract, lost profits, or economic damages, numbers are central to the outcome. Calculating damages is not just about pointing to a financial loss. It requires developing a credible model of what would have happened if the disputed event had not occurred.
This involves examining historical financials, industry trends, and reasonable assumptions about the future. The result is a damages analysis that is not only well-supported, but also understandable and defensible in court.
When the Court Needs Clear Explanations
Financial evidence is complex, and accounting terminology can be difficult for judges and juries to follow. An effective expert does not just crunch numbers. We also explain them clearly.
By translating technical financial concepts into plain, accessible language, we make sure fact finders can understand and weigh the evidence with confidence. The ability to communicate is often just as important as the calculations themselves.
The Bottom Line
If financial issues are central to a case, the best strategy is to involve an expert early. Doing so allows us to identify gaps in discovery, anticipate challenges, and develop analyses that integrate seamlessly with the broader legal arguments. When the outcome of a case depends on the numbers, having the right financial forensics and business valuation expert on your team can make all the difference.
If you are handling a case where financial records, business value, or damages are in dispute, let’s talk. The sooner we are involved, the more completely we can help uncover the story hidden in the numbers.