The Role of a Forensic Accountant

The role of a forensic accountant extends well beyond number-crunching. Forensic accountants investigate financial disputes, analyse evidence, produce court-compliant reports, and - when required - give oral evidence under cross-examination. They work closely with solicitors, barristers, and the courts to resolve cases that turn on financial questions.

This page explains what forensic accountants do in practice, how their role differs from other accounting professionals, and what solicitors should look for when choosing one.

What does a forensic accountant actually do?

The day-to-day reality of forensic accounting involves four main activities.

Document review. Every forensic engagement starts with documents. Bank statements, management accounts, tax returns, contracts, invoices, correspondence - sometimes thousands of pages. The forensic accountant reviews this material systematically, looking for patterns, anomalies, and gaps. In large fraud cases, document volumes can run into millions of pages, requiring structured data rooms and specialist software.

Financial analysis. Once the documents are assembled, the forensic accountant analyses the data. This might involve reconstructing a company's trading history, calculating loss of profits on a "but for" basis, valuing a business, or tracing money through a chain of transactions. The analysis must be thorough, documented, and capable of being explained to a non-specialist audience.

Report drafting. The forensic accountant's report is the primary deliverable. It sets out the findings, the methodology, and the expert's opinion. In civil proceedings, the report must comply with CPR Part 35 and Practice Direction 35. In family cases, FPR Part 25 applies. The report format is prescribed: qualifications, instructions, facts relied upon, methodology, range of opinion, conclusions, and a statement of truth.

Conferences with counsel. Forensic accountants regularly attend conferences with barristers to discuss the financial evidence, refine the scope of work, and prepare for trial. They may also attend case management conferences, mediations, and settlement meetings. The forensic accountant's ability to explain complex numbers clearly is tested long before the witness box.

Forensic accountant vs auditor: the key differences

Solicitors sometimes confuse forensic accountants with auditors. The roles are fundamentally different.

An auditor provides an opinion on whether financial statements give a "true and fair view." They work within International Standards on Auditing (ISAs), test samples of transactions, and report to shareholders. An audit is a compliance exercise. It looks at what a company has reported and checks whether that reporting is materially accurate.

A forensic accountant investigates what actually happened. They don't accept the reported figures as a starting point - they go behind them. Where an auditor might sample 50 transactions from a population of 10,000, a forensic accountant might review all 10,000 if the case requires it.

The mindset is different too. Auditors exercise "professional scepticism" - a polite awareness that things might not be as presented. Forensic accountants bring an investigative mindset. They actively look for what's wrong, what's missing, and what doesn't add up. They ask: who benefits from this transaction? Why was this payment made in cash? Why does the director's loan account show withdrawals of GBP 400,000 when dividends of only GBP 50,000 were declared?

The importance of forensic accounting lies precisely in this investigative rigour. An audit wouldn't have found the hidden assets. A forensic investigation will.

Types of work forensic accountants undertake

The role of a forensic accountant covers a broad range of work. The common thread is that each involves financial analysis in a legal or dispute context.

Commercial damages. Quantifying loss of profits, wasted expenditure, and diminution in value in breach of contract claims, tortious claims, and professional negligence actions. The forensic accountant models the counterfactual - what would have happened but for the wrongful act - and compares it against actual performance.

Matrimonial finance. Analysing Form E financial disclosure, valuing business interests for ancillary relief, conducting lifestyle analysis to identify hidden income, and preparing independent expert reports for the Family Court. In many cases, the forensic accountant is appointed as a single joint expert (SJE) under FPR Part 25.

Fraud investigation. Tracing stolen funds, reconstructing financial records, analysing bank statements for unexplained credits or circular payments, and preparing evidence for criminal or civil fraud proceedings. Forensic accountants may also conduct internal investigations for companies that suspect employee fraud.

Insolvency. Reviewing antecedent transactions, quantifying wrongful trading claims under s.214 Insolvency Act 1986, tracing assets dissipated pre-insolvency, and supporting insolvency practitioners in misfeasance proceedings. The financial analysis is often central to whether the IP decides to pursue a claim.

Regulatory work. Supporting individuals and firms facing FCA, SRA, or HMRC investigations. Where the investigation involves tax enquiries, our colleagues at mtd.digital provide specialist tax dispute support alongside the forensic work.

Criminal defence. Challenging the prosecution's financial evidence in fraud, money laundering, and confiscation proceedings. Defence forensic accountants re-analyse the Crown's case, identify weaknesses, and present alternative explanations for the financial evidence.

The forensic accountant as expert witness

Many forensic engagements end with a written report that helps the parties settle. But some cases go to trial, and the forensic accountant must give oral evidence.

Under CPR Part 35.3, the expert's duty is to the court. Not to the solicitor who instructed them. Not to the client who is paying. To the court. This is non-negotiable. A forensic accountant who slants their evidence to favour the instructing party will lose credibility and may face professional sanctions.

The expert's report must comply with Practice Direction 35.10. It must contain:

• Details of the expert's qualifications and experience
• A statement of the substance of all material instructions
• The facts and assumptions relied upon
• The methodology and reasoning
• A summary of conclusions
• A statement that the expert understands their duty to the court
• A statement of truth

In some cases, the court appoints a single joint expert rather than allowing each party to instruct their own. SJE appointments are common in family proceedings and in lower-value commercial disputes. The SJE's report carries particular weight because it represents the only expert evidence before the court.

Where each party has their own expert, the court usually directs the experts to meet and prepare a joint statement under CPR Part 35.12. This identifies areas of agreement and disagreement. At trial, the experts may give evidence sequentially or concurrently ("hot-tubbing"), depending on the court's direction.

How forensic accountants gather and analyse evidence

Forensic accountants use a range of techniques to gather and analyse financial evidence. The approach depends on the case, but common methods include:

Bank statement analysis. Reviewing every transaction across multiple accounts to identify unexplained receipts, unusual payments, transfers to connected parties, and patterns of activity. In fraud cases, this is often the foundation of the entire investigation.

Lifestyle analysis. Comparing a person's declared income against their demonstrable expenditure - mortgage payments, school fees, holidays, car purchases, credit card spending. If someone declares income of GBP 40,000 but spends GBP 120,000, the gap needs explaining. This technique is particularly effective in matrimonial cases where income suppression is suspected.

Document requests and disclosure. Forensic accountants identify what documents are needed and advise solicitors on the appropriate disclosure applications. In some cases, third-party disclosure orders or Norwich Pharmacal orders are required to obtain records from banks, companies, or other parties.

Digital forensics. Increasingly, financial evidence is held electronically. Forensic accountants work with digital forensics specialists to recover deleted files, analyse metadata, and extract financial data from accounting systems, email archives, and mobile devices.

Benford's Law analysis. A statistical technique that tests whether the distribution of leading digits in a data set follows the expected pattern. Fabricated figures tend not to follow Benford's distribution. It's a useful screening tool for identifying anomalies in expense claims, invoices, and journal entries.

What does forensic accounting involve in practice?

A typical forensic accounting engagement follows a structured lifecycle, though the forensic accounting process is adapted to fit each case.

Scoping. The forensic accountant reviews the letter of instruction, discusses the case with the solicitor, and produces a scope of work with a fee estimate. This stage is critical - a properly scoped engagement avoids wasted costs and ensures the work is proportionate.

Data collection. Documents are assembled, indexed, and reviewed. In large cases, this may involve setting up a data room or using document review platforms. The forensic accountant identifies any gaps in the available documents and advises on further disclosure requests.

Analysis. The core of the engagement. Financial data is analysed, calculations are performed, and the forensic accountant forms their opinion. This stage may involve multiple iterations as new documents become available or the scope evolves.

Draft report. The forensic accountant prepares a draft report for review by the instructing solicitor. The solicitor may raise questions of fact or suggest areas where the analysis should be expanded. The solicitor cannot ask the expert to change their opinion.

Finalisation. The report is finalised, signed, and disclosed. In cases with opposing experts, the joint expert meeting follows, producing a joint statement for the court.

Trial. If the case doesn't settle, the forensic accountant gives oral evidence. This involves examination-in-chief, cross-examination, and (sometimes) re-examination. Preparation is key - the forensic accountant must know their report inside out and be ready to defend their methodology under pressure.

Choosing the right forensic accountant for your case

Not all forensic accountants are the same. Solicitors should consider several factors when choosing one.

Qualifications. Look for ICAEW (ACA/FCA) or ACCA qualified accountants. ICAEW's Forensic & Expert Witness accreditation is a strong indicator of specialist capability. Membership of the Academy of Experts or the Expert Witness Institute is also relevant.

Court experience. Has the forensic accountant given oral evidence before? In which courts? How often? An expert who has never been cross-examined is a risk at trial. Ask for examples of cases where they've appeared.

Sector knowledge. A forensic accountant who specialises in matrimonial finance may not be the right choice for a complex commercial fraud case, and vice versa. Match the expert's experience to the subject matter of your case.

Availability. Can the forensic accountant meet the court's timetable? Are they available for the trial window? Late changes of expert are disruptive, expensive, and sometimes impossible to achieve with the court's permission.

Proportionality of fees. The expert's fees should be proportionate to the amount in dispute. A partner at a Big 4 firm charging GBP 600 per hour may not be the right fit for a GBP 200,000 shareholder dispute. Equally, the cheapest option isn't always the best - you need someone who will produce a report that stands up under scrutiny.

Jack Ross Chartered Accountants has provided forensic accounting services since 1948. Our team includes ICAEW and ACCA members with direct court experience across commercial, family, and criminal proceedings. To discuss your case, contact us or call 0161 832 4451.