Over the past few decades, there has been a dramatic increase in civil litigation in the United States. At the same time, lawsuits have become more complex. The complicated nature of many cases has caused attorneys to rely more heavily on hired consultants.

When financial and economic issues arise, the consultants that attorneys turn to most often are CPAs. CPAs are considered the foremost authorities on such issues and are distinguished from other accountants by strict licensing requirements. In the legal arena, CPAs act as either expert witnesses, serving as objective outsiders used to explain financial issues to the judge, jury or arbitrator, or as consultants, presenting private advice to attorneys.

CPAs' Role in Case Preparation

The most significant contributions CPAs make in the litigation process often occur before a trial begins. Accountants may help attorneys by investigating the case, as well as analyzing and translating complex financial data. CPAs may also educate the attorney on relevant accounting, auditing or tax issues.

Since CPAs are often experts on management information systems, they can be valuable to attorneys in collecting, organizing and summarizing the large number of documents needed for a case. They can also reconstruct lost or stolen records.

As a case progresses, CPAs may assist attorneys in taking depositions. Since CPAs know the language of business, they can identify inconsistencies or expose flaws in the testimony of witnesses. They also may help attorneys develop questions for witnesses and evaluate the evidence of the opposition.

CPAs are involved in almost all types of litigation because it is the issues involved, rather than the legal nature of the case, that determine the need for accounting expertise. However, the following is a sample of the kinds of cases that are most apt to involve CPAs:

  • Civil Lawsuits
  • Divorce Settlements
  • Bankruptcies
  • Criminal Cases
  • Alternative Dispute Resolutions

Civil Lawsuits

Plaintiffs in civil litigation must prove that they suffered damages and then calculate those damages. A CPA who is engaged by the plaintiff's lawyer creates a "damage model." Such models generally describe the injury suffered by the plaintiff that is attributable to actions of the defendant, and estimate the monetary loss suffered by the plaintiff as a result of those actions.

CPAs can work with defense lawyers, as well. In this capacity, a CPA would review and critique the plaintiff's damage model. In addition, the CPA may develop an alternate damage estimate to support the defendant's case.

CPAs provide other services during civil litigation including antitrust analyses, business and pension valuations, and statistical analyses.

Divorce Settlements

Marital dissolutions often present attorneys with complex financial issues. CPAs can assist in divorce settlements by:

  • Preparing financial statements for the marital estate
  • Tracing the source of purchases to determine if they were made using separate or marital funds
  • Determining a standard of living in order to establish alimony or child support payments
  • Valuing marital assets
  • Determining the tax consequences of asset distributions and the tax effects of various scenarios for dividing the marital estate


Clients filing for bankruptcy may ask a CPA to develop a plan that will help them to emerge successfully from the bankruptcy proceedings. In this role, CPAs may also assume the responsibility of preparing the financial schedules that must be filed monthly with the court.

In bankruptcy proceedings, however, CPAs can also work for other groups involved, including the secured and unsecured creditors, and any other interested parties.

Criminal Cases

Tough economic times have forced more and more companies to try to recover funds lost through crime, employee theft and fraud. Forensic accounting, the professional accounting services in this area, makes use of CPAs' skill and experience in uncovering fraud and mismanagement. CPAs are able to interpret complicated financial transactions to discover whether criminal activities are deliberately being disguised.

In bankruptcy cases, for example, an examination of a debtor's books by a CPA can often disclose that preferential payments were made just before the bankruptcy filing.

Alternative Dispute Resolutions

To avoid involvement in a long, costly trial, opposing parties will often agree to mediation or arbitration - both known as alternative dispute resolutions (ADRs). In such cases, CPAs may be called upon to act as objective negotiators, helping opposing parties reach a fair and mutually agreeable financial settlement.

Choose a CPA for Litigation Support

The reputation CPAs have for being honest, objective financial experts position them as the top providers of litigation services. Since CPAs must complete continuing professional education each year, they are well versed on the latest economic or financial issues. In addition, CPAs possess the skills necessary to comprehend the facts of a case, and analyze and explain them in simple terms to clients, attorneys, judges and juries.

Prepared by the CPA Communications Council in cooperation with the American Institute of Certified Public Accountants. © 1993 AICPA, Inc.

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