The discovery process: How CPAs can help

During the discovery process, CPAs can play a key role in ensuring that important financial facts are disclosed and all relevant financial documents are obtained.

CPAs are skilled in such areas as financial auditing procedures, accounting processes, financial statement reviews, tax return reviews, statistical analyses and forensic accounting techniques. They can use this broad knowledge to assist attorneys with the large amounts of financial and technical evidence, testimony and documentation often involved in preparing a case.

Naperville CPACPAs typically provide pretrial discovery support by:

  • Preparing a complete document production request. Depending on the type of case, financial records (both public and nonpublic) may be used to demonstrate an individual’s ability to pay alimony or indicate a company’s profit potential for calculating damages. A CPA can ensure that an appropriate and complete list of documents is requested and can help the attorney analyze information as it is received.
  • Aiding in the formulation of deposition questions and evaluation of the significance of deposition testimony. CPAs can draw on their financial expertise to give input into deposition preparations and assist with questions involving financial data interpretations, establishing or refuting the existence or extent of a business condition and developing damage models.
  • Providing reports as needed and contributing to motions, pleadings, briefs and interrogatories. CPAs are ideal preparers of reports involving financial concepts such as cash flow studies, lifestyle analyses, damage models and business valuations. They can help attorneys present complex financial material in an understandable way and provide insights that may aid an attorney in developing an effective strategy regarding the financial aspects of a case.

CPAs can also assist attorneys immediately prior to the discovery process and during the information gathering and case analysis phase. Prior to an attorney accepting a case, a CPA can help in determining the reward and risk factors involved in a case. For example, a CPA can determine a preliminary value of anticipated damages and the feasibility of acquiring sufficient financial evidence and compare these factors to the anticipated cost of the litigation.

Additional areas in which CPAs can help in the pretrial stage include:

  • Collecting and interpreting financial data
  • Analyzing relevant business records
  • Evaluating a business or industry
  • Determining the impact of proposed settlements including tax aspects

CPAs also may assist attorneys by serving as fact witnesses, consulting experts or testifying experts.

During the discovery phase of a breach of contract case, for example, a CPA involved in structuring an acquisition could be an ideal candidate to serve as a fact witness and answer questions about financial facts relevant to the case.

A CPA serving as a testifying expert could assist in the discovery process by analyzing and interpreting the technical data provided by fact witnesses and consulting experts to determine the pieces of data that are relevant enough to ultimately be used in testimony and trial exhibits.

The discovery process is a critical period in any legal case. A trained CPA can be a valuable member of the trial team when financial issues must be evaluated and decided.

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