The culmination of a financial expert’s work in a divorce or child support case is the expert report. This is followed by testimony, at deposition and possibly trial. The process of reporting and testifying should not be taken lightly, as these tasks make the financial analysis come to life.
The forensic accountant or financial analyst will complete a lifestyle analysis or other financial analysis, typically producing a report that can be understood by non-accountants. The financial expert always runs the risk that a user of the report will not understand it. This is especially precarious when the user of the report is the judge in the family law case.
Although a written report is not necessarily required of a financial expert in a family law case, a written report is recommended because it is the best way to present complicated financial issues. The report is a roadmap of the financial issues for the attorneys and the judge.
The key to a good report is that it is well organized and understandable by people with no accounting background. While there is no standard format for a report on a lifestyle analysis or other financial analysis in a family law case, there are five recommended sections for the written report in a family law case:
- Background – This is a short summary of the financial issues in the case and the engagement agreed to by the expert. It defines the issues on which the expert was retained to opine, and sets the stage for explaining the analysis the expert completed.
- Documentation – The forensic accountant or financial expert provides a summary of the documents and other information made available to him or her for analysis.
- Analysis – In this section, the expert explains the information analyzed and the procedures used to evaluate the numbers. If estimates were used during the financial analysis, they should be explained here, including the reasons why and how the estimates were made. This section could be very lengthy and detailed, especially if there was substantial analysis that needs to be described.
- Opinions –The opinion section of the report is the most important, and will most likely include an explanation of the methodology used and the calculations made. More thorough explanations can lend credibility to the expert’s work and opinions.
- Attachments – If the expert has referred to exhibits or attachments in the body of the report, they should be included at the back of the report. Often the attachments will include only the most important pieces of evidence or spreadsheets with detailed calculations.
A competent expert witness must not only be a good writer, he or she must also be able to communicate findings orally. It is always advisable for the family lawyer and the financial expert to walk through testimony prior to depositions and trials. During preparation, the attorney can share the litigation strategy with the expert so that the expert can keep it in mind as he or she prepares for testimony.
When preparing, it is advisable to consider things that opposing counsel may try to use to his or her advantage. Opposing counsel may try to diminish the credibility of the expert, or may point out errors or weaknesses in the expert’s report. The financial expert should prepare for criticism and consider how she or he will respond during testimony.
Court testimony can be enhanced with visual aids. Some people do not learn well with only auditory information, and need visual information in order to fully comprehend information. Graphs and charts relative to the numbers in a divorce case can ensure that the judge has a full understanding.
Working With Your Expert
A good working relationship between the family lawyer and the financial expert is the key to a successful engagement. The expectations for the expert must be clear from the start, including the scope of work, the topics on which opinions are sought, and the form that the final report will take.
The attorney and the expert must be candid with one another throughout the process. If the work load or deadline is unmanageable, that must be communicated. If the opinions being developed by the expert are not in line with the attorney’s expectations, this must be discussed in case the attorney wants to amend the scope of work or abandon the project.