There are a number of Expert Witness Codes of Conduct and luckily they all focus on the important duties of independence, expertise and an overriding duty to assist the court.
This article provides an overview of the Forensic Accounting Standard and the Expert Witness Codes of Conduct.
APES 215 – Forensic Accounting Services is the standard issued by Accounting Professional & Ethical Standards Board Ltd (AP ESB).
In many ways the Forensic Accounting Standard (APES 215) is very similar to the rules applying to Expert Witnesses in most courts throughout Australia e.g.:
Uniform Code of Conduct – Supreme Court NSW
- Family Law
- Federal Court
- VIC Supreme Court
- QLD Supreme Court
The standard applies to Chartered Accountants in Australia.
They draw attention to a number of the mandatory sections of the standard.
A Member who is acting as an Expert Witness shall comply with the following:
(a) the paramount duty to the Court which overrides any duty to the Client or Employer;
(b) a duty to assist the Court on matters relevant to the Member’s area of expertise in an objective and unbiased manner;
(c) a duty not to be an advocate for a party;
(d) a duty to make it clear to the Court when a particular question or issue falls outside the Member’s expertise.
This is very similar to the Uniform Code NSW Supreme Court:
2. General duty to the court
(1) An expert witness has an overriding duty to assist the Court impartially on matters relevant to the expert witness’s area of expertise.
(2) An expert witness’s paramount duty is to the court and not to any party to the proceedings (including the person retained the expert witness).
(3) An expert witness is not an advocate for a party.
and, Family Court:
Expert witness’s duty to the court
(1) An expert witness has a duty to help the Court with matters that are within the expert witness’s knowledge and capability.
(2) The expert witness’s duty to the court prevails over the obligation of the expert witness to the person instructing, or paying the fees and expenses of, the expert witness.
(3) The expert witness has a duty to:
One of the areas that we often see involves the issue of independence, in particular, where the retained accountant for a client prepares an expert accounting for the same client.
In our experience, this causes a number of problems:
- the perception that the accountant is biased having his client’s interests as paramount over and above the interests of the court; and,
- that the accountant may hold their own interests as paramount to protect or defend poorly prepared accounts and advice. The expert ends up defending advice or work that they did in the past rather than focusing on the issue at hand. It can be relatively easy to discredit an expert account witness by focusing on errors in prior years’ preparation of financial accounts and tax returns that they prepared for the party.
I refer to section 3.8 of APES 215.
If a Member in Public Practice is asked to provide a Professional Service to a Client where:
(a) the Member or the Member’s Firm is providing or has provided an Expert Witness Service to the Client; or
(b) the member or the Member’s Firm is providing or has provided an Expert Witness Service to a different Client,
and the proposed Professional Service is related to the Expert Witness Service, and the Member determines that a reasonable and informed third party having knowledge of all the relevant information, including safeguards applied, would regard the objectives of the proposed Professional Service to be undertaken as being inconsistent with the objectives of the Expert Witness Service, then the Member shall decline the Engagement or the relevant part thereof.
A Member who is providing an Expert Witness Service shall disclose matters in the Member’s Report that will assist the Court to assess the degree of the Member’s independence.
The standards set out in APES 215 are very similar to that of the Expert Codes of Conduct of the Supreme Court of New South Wales and the Family Court.
The important factors are always:
- Overriding duty to assist the court; and
- Expertise in the field.