Who are the financial experts who can testify about financial matters? Often, damages are measured in lost profits, and the expert witness finance must trace these losses to the defendant’s misconduct. Profits are declining for many reasons, including increased competition, rising costs, patent expiration, product obsolescence, and legal and regulatory constraints. It is crucial to understand the factors contributing to these declines and how to quantify them in court.
When CPAs testify about financial issues in litigation, the court may have various reasons to accept their testimony. Regardless of the cause, their expertise is invaluable. Their expertise can help triers understand the financial issues and attach a measurable value to the plaintiff’s injury. Testifying about financial issues is also a way for CPAs to build a niche in the litigation services market and learn how to feel comfortable on the witness stand.
Accountants in forensic accounting may be asked to testify in a legal case when there is a suspicion that someone has committed a financial crime. It is one of the fastest-growing areas of law enforcement, and many accountants choose to branch out into investigative work. This growing profession requires specific training and a passion for the law. Despite the difficulties, accounting experts often succeed in helping attorneys and prosecutors resolve cases in the most favorable way possible.
In addition to writing and presenting on topics related to investing, CFAs also testify to Congress on issues concerning financial services. For example, the U.S. Senate Banking Subcommittee provided a recent CFA testimony. CFAs testified about financial services, including how costly overdraft fees can be. CFAs commended some banks for ending overdraft fees. However, other concerns were expressed to CFAs during testimony.
The SEC is considering rules to regulate investment advisers. The proposal includes a discussion draft of the SEC rules, which the agency intends to submit to Congress for final approval. The proposal would establish a governing body for investment advisers and ensure that all advisers are independent of any SRO. The discussion draft would also ensure representatives from different adviser industry parts sit on the board. This proposal would have major implications for the entire investment adviser industry if passed.
Most legal cases involve financial implications. Increasingly, lawyers are relying on financial experts to testify in court. However, challenges have emerged to expert testimony. Banking expert witnesses may be requested to provide testimony in instances ranging in complexity from minor management disputes involving a few financial institutions to more complicated ones involving substantial loan issues with bank customers.