What Powers Does a Forensic Accountant Have?

Solicitors sometimes ask what powers a forensic accountant actually has. It's a good question, and the honest answer is nuanced. A forensic accountant doesn't have statutory powers in the way that HMRC, the SFO, or the police do. Their power comes through the legal process - through the courts, through disclosure obligations, and through the weight that a well-prepared expert opinion carries with a judge. Understanding this distinction matters when planning litigation strategy and setting client expectations.

The forensic accountant's legal standing

A forensic accountant is an expert witness - someone with specialised knowledge that the court needs to determine the issues in dispute. Under CPR Part 35 (civil proceedings) and FPR Part 25 (family proceedings), an expert's overriding duty is to the court, not to the party who instructs and pays them.

This status gives the forensic accountant's opinion significant weight. A judge will treat a properly qualified forensic accountant's evidence differently from, say, a party's own accountant giving factual evidence about the books. The forensic accountant's independence and duty to the court is what gives their analysis credibility.

But the forensic accountant doesn't have the power to compel anyone to do anything. They can't issue subpoenas, execute search warrants, or freeze bank accounts. Those powers belong to the court, and the forensic accountant works within the framework that the court provides.

Powers in civil proceedings

In civil litigation, the forensic accountant's ability to access information comes primarily through the court's disclosure and evidence powers:

Standard disclosure and specific disclosure. Under CPR Part 31, parties must disclose documents on which they rely, documents that adversely affect their case, and documents that support the other side's case. The forensic accountant reviews what's been disclosed, identifies gaps, and advises the solicitor on what further disclosure to seek. If the other side hasn't produced bank statements for a specific period, or if company records are suspiciously incomplete, the forensic accountant's analysis of what's missing helps the solicitor make a targeted application for specific disclosure.

Third-party disclosure (Norwich Pharmacal orders). Where information is held by a third party - a bank, an accountant, a company formation agent - the court can order disclosure under the Norwich Pharmacal jurisdiction (Norwich Pharmacal Co v Customs and Excise [1974] AC 133). The forensic accountant advises on exactly what information to seek and from whom. Bank records obtained through Norwich Pharmacal orders are often the single most valuable source of forensic evidence.

Freezing injunctions. If there's a real risk that the other party will dissipate assets to frustrate any judgment, the court can grant a freezing injunction (formerly Mareva injunction). The forensic accountant's analysis of fund flows, asset movements, and overseas transfers can support the application by demonstrating the risk is real, not hypothetical.

Written questions to experts. Under CPR 35.6, the other party can put written questions to the forensic accountant about their report. The forensic accountant must answer these questions, and the answers form part of the expert evidence. This is a powerful mechanism - it forces the forensic accountant to address challenges to their methodology and conclusions in writing, before trial.

Experts' meetings. CPR 35.12 allows the court to direct experts to discuss the issues and produce a joint statement. These meetings (usually without solicitors present) identify what the experts agree on and what they disagree about. Areas of agreement narrow the issues for trial. A skilled forensic accountant can be persuasive in these meetings, and the joint statement carries significant weight with the judge.

Powers in criminal proceedings

In criminal cases, the forensic accountant's role differs depending on whether they're instructed by the prosecution or the defence.

Prosecution expert. The forensic accountant analyses evidence obtained through police powers - seized documents, compelled production orders (PACE 1984, s.9), account monitoring orders (Proceeds of Crime Act 2002, s.370), and material obtained through mutual legal assistance from overseas jurisdictions. The forensic accountant doesn't exercise these powers directly, but their analysis shapes what further evidence the prosecution seeks. They produce a report that complies with Criminal Procedure Rules Part 19 and the Criminal Practice Directions.

Defence expert. A forensic accountant instructed by the defence reviews the prosecution's financial evidence, identifies weaknesses in their analysis, and provides an alternative interpretation where appropriate. The defence expert has access to the prosecution's disclosed material and can request further disclosure through the solicitor. Defence forensic accounting work in financial crime cases - fraud, money laundering, tax evasion - often focuses on challenging the prosecution's methodology, highlighting alternative explanations for suspicious transactions, and questioning the completeness of the investigation.

SFO and HMRC investigations. The Serious Fraud Office has compulsory powers under s.2 Criminal Justice Act 1987 to require answers to questions and production of documents. HMRC has extensive information powers under Schedule 36 Finance Act 2008. Forensic accountants working on these cases analyse the material obtained through these statutory powers. In our experience, the volume of financial data in SFO and HMRC cases can be enormous - tens of thousands of transactions across multiple jurisdictions and years of trading.

Limitations

It's important to be honest about what a forensic accountant can't do:

No power to compel disclosure. A forensic accountant can't force anyone to hand over documents. They rely on the court's powers (in litigation) or their client's cooperation (in private investigations). If the other party refuses to disclose or provides incomplete information, the forensic accountant reports on what's available and highlights the gaps. The court draws its own inferences.

No power to enter premises or seize documents. Unlike police officers or HMRC officers, a forensic accountant has no right of entry. In fraud investigations where there's a risk of evidence destruction, the solicitor may need to obtain a search order (formerly Anton Piller order) - the forensic accountant advises on what to look for, but the order comes from the court.

No power to make legal determinations. A forensic accountant gives opinions on financial matters within their expertise. They don't determine whether fraud has occurred (that's for the court), whether a transaction is legal (that's for the lawyers), or whether someone is guilty or liable. Their role is to analyse the financial evidence and present their findings clearly.

Jurisdictional limits. Forensic accountants operating in England and Wales work within the UK legal framework. Where assets or transactions involve overseas jurisdictions, the forensic accountant can analyse available evidence, but obtaining evidence from abroad may require letters rogatory, mutual legal assistance treaties, or proceedings in the foreign jurisdiction. This is increasingly relevant as offshore structures, cryptocurrency, and international fund flows become more common in fraud cases.

The difference between a forensic accountant and an auditor

This question comes up regularly, and the distinction matters for litigation strategy.

An auditor examines financial statements to give an opinion on whether they present a 'true and fair view' under applicable standards (ISAs, FRS 102, IFRS). Auditors test samples of transactions, assess controls, and apply materiality thresholds. Their work is designed to provide reasonable - not absolute - assurance. An audit is backwards-looking and standards-driven.

A forensic accountant investigates specific questions. They don't sample - they examine every relevant transaction. There's no materiality threshold; a single transaction can be significant if it's evidence of fraud or non-disclosure. Forensic accounting is question-driven and evidence-driven. The forensic accountant follows the evidence wherever it leads, rather than testing whether the accounts comply with reporting standards.

In practice, this means a clean audit opinion doesn't rule out fraud. Auditing standards explicitly acknowledge that audits are not designed to detect fraud (ISA 240 addresses the auditor's responsibilities, but it's a limited obligation). When solicitors ask "how did the auditor miss this?", the forensic accountant often needs to explain the gap between what an audit is designed to find and what a forensic investigation would have uncovered. This gap is central to professional negligence claims against auditors.

Working with solicitors and barristers

The most effective forensic accounting work happens when the forensic accountant, solicitor, and barrister work as a team - each bringing their own expertise and respecting each other's professional boundaries.

With solicitors: The solicitor manages the instruction, handles court applications for disclosure and evidence, and coordinates the expert's work within the litigation timetable. The forensic accountant relies on the solicitor to obtain documents through the legal process and to provide context about the case that shapes the investigation. Clear, focused questions from the solicitor produce better forensic reports.

With barristers: The barrister presents the forensic evidence at trial and cross-examines the opposing expert. Pre-trial conferences between the forensic accountant and counsel ensure the barrister understands the financial evidence and can present it effectively. A good barrister will test the forensic accountant's conclusions in conference - if the analysis can survive that scrutiny, it will withstand cross-examination.

The forensic accountant doesn't take instructions on what opinion to give. Their independence is non-negotiable. But they can and should discuss the issues with the legal team to ensure they're addressing the right questions and presenting their evidence in the most helpful way for the court.

If you need to understand what a forensic accountant can bring to your case, contact Jack Ross for a confidential discussion. We'll give you a straight assessment of whether forensic accounting analysis will add value and what the investigation might uncover. We've been providing expert witness evidence and forensic investigation services from our Manchester office since 1948, working with solicitors and barristers across England and Wales.