By: Gregory W. Herring, CFLS, AAML, IAFL
This follows the May 2026 presentation of the above title given by Molly Warren, CPA (of Gursey Schneider), Ronald Granberg, CFLS, AAML, IAFL, and me at the 49th Symposium of the Northern California Chapter of the American Academy of Matrimonial Lawyers In Napa, California. I started with some practical points:
Forensic accountants are important resources for family lawyers. They assist with:
- Case consultation and preparation;
- Streamlining presentations through, for instance, post-separation accounting exhibits (see our PSA exhibit link below), community property balance sheets, and other compilations, and
- Persuading judicial officers.
They require certain qualifications and operate under professional standards:
- CPAs performing forensic accounting (litigation) services are subject to Rule 102 of the American Institute of Certified Public Accountants (AICPA): “In the performance of any professional service, a member shall maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others.”
- Complaints for violations of professional standards are subject to investigation by the California Board of Accountancy. And the Board has teeth — the results of Disciplinary Actions are publicly disclosed.
Therefore:
- It is appropriate to seek a forensic accountant to give you the opinion you need, but
- It is not appropriate to demand she give you the opinion you need.
Forensic accountants are not turnkey. They Require Management and Control – “Who’s Driving the Bus?” I’m Driving the Bus! – Which means you’re driving the bus!
We present forensic accountants to our distressed and reliant clients — to whom we have the highest of fiduciary duties — Therefore we must supervise our experts’:
- Fees;
- Engagement letters;
- Information – for instance, where are they going to get it? – directly from your client without you in the loop? Either way, you must focus on document management – including streamlining, coordinating and economizing for your client;
- Pretrial work and organization. See Winternitz v. Winternitz 235 Cal.App.4th 644 (2015) – a cautionary narrative about how an expert’s distressed staff/office arguably compromised a client’s case, and
- Proposed testimony. This is especially since it can be used against your client:
- Code of Civil Procedure section 2034.310 subd. (a) allows a party to call an expert who has been designated by another party and has thereafter been deposed.
Ultimately, avoid “handing over” your client’s case to the accountants. You must understand the basic substance of their topic and what you’ll need to provide them.
Fundamental to managing forensic accountants is a strong understanding of the basic laws governing all forensic witnesses. Initially, the Evidence Code provides for two different types of experts:
- Section 800 lay witnesses, which are outside the scope of this piece, and
- Section 801 non-lay witnesses — the qualifications for which are stated therein in detail. Ask yourself beforehand: does your retained expert’s proposed testimony qualify under section 801?
The Evidence Code provides two other ways to slice this: section 730 versus 733:
- Section 730: A court can appoint an expert witness on its own motion or after an appropriate Request for Orders by a party. Ask yourself: are three heads (the court’s expert, your client’s expert, and opposing party’s expert) better and cheaper than two?
- Consistent with the above point, section 733 allows the retention of a client’s own expert on her own dime.
Code of Civil Procedure section 2034 provides the cookbook for requesting designations of, designating, and formally managing expert witnesses. It is extensive –know it!
At trial, your goal is to get your expert witness’s testimony into evidence and keep out the testimony of your opponent’s expert.
Getting “yours” in:
Qualify her under Evidence Code section 801 (see above). Do this by having your expert initially explain their:
- General background, experience, education;
- Pertinent training;
- Membership in pertinent professional associations;
- Other pertinent background: teaching positions, publications, lectures, consulting work;
- Expert witness experience in other trials;
- History of being qualified as an expert in other cases and counties, and
- Position concerning the specific application of their background to their immediate assignment.
Then request determination of the expert’s qualifications under section 801 for the matter for which she was engaged. Think twice about potentially stipulating to your expert’s qualifications to testify. If she is new to the particular courtroom, you might instead wish to impress the judge by having her explain the foregoing.
Once you have qualified your expert, lead her through the classic direct examination cookbook:
- What was your assignment?
- Did you complete the assignment and form an opinion?
- What is/are the opinion(s)?
- What is/are the basis/bases for the opinion(s)?
Know People v. Sanchez (2016) 63 Cal.4th 665: An expert cannot relate as true; case-specific facts asserted in hearsay statements, unless they are independently proven by competent evidence or are covered by a hearsay exception. (Id., at 686.)
Essentially this means, in forming and testifying re her opinion, an expert can:
- Consider inadmissible hearsay;
- Rely on inadmissible hearsay;
- Generally describe inadmissible hearsay,
- But just not regurgitate the details.
Keeping “theirs” out:
This includes cross examination:
- Evidence Code section 721(a) provides the basis.
- Purpose: It is not an argument (those are for closings); it is a surgical strike with two main aspects:
- Eliciting favorable testimony from the opposing expert by getting them to agree with the facts that support your case-in-chief and are consistent with the theory of your case, and
- Conducting a destructive cross by asking questions that will discredit the witness or her testimony so the judge will minimize or even disregard it.
Cross-examination techniques include challenging the expert’s:
- Assumptions: Does the witness really have special knowledge, skill, etc. on the particular subject on which she is to express an opinion?
- Example: Is a forensic accountant qualified to testify regarding executive compensation?
- Example: Is he qualified to testify regarding a business valuation?
- Example Is he qualified to testify regarding “reasonable needs” of child in extraordinary high earner case?
- Methodology: For instance, did they get cute in deleting discoverable notes?
- Factual errors, and
- Reliance on privileged matters.
You can use treatises for impeachment under Evidence Code section 721 subd. (b).
Hypotheticals are useful where the facts and data upon which the expert will base her testimony were either not perceived by her or made known to her at or before trial. For instance, this could include factual developments following her report and prior deposition.
Other challenges to opposing experts include:
- Code of Civil Procedure section 2034.300 exclusions on objection – for instance, when the witness:
- Was not properly designated under 2034;
- Failed to submit an expert witness declaration;
- Failed to produce reports and writing, or
- Was not made available for deposition; or for a “reasonable” deposition
- Motions in Limine.
- Evidence Code section 802 motions to question expert witnesses regarding their qualifications on voire dire. It allows you to interrupt the other side’s direct examination for this.