Oral testimony as an expert witness

The role of an expert in proceedings is to provide the court with technical knowledge that is objective and does not favour either side (Beran 2009, 133). While acting as an independent agent, and not as an advocate for their client, experts are required to prepare a report that expresses an opinion based on available evidence (Beran 2009, 136). If the report complies with the contents requirements in section 23.13 of the Federal Court Rules (2011), a party may call the expert to give evidence at trial (Federal Court Rules 2011, s. 21.11).

Generally, evidence of an opinion is not admissible under section 76 of the Evidence Act (1995). However, expert opinion evidence is an exception to this where the expert complies with the five rules of admissibility (Australian Law Reform Commission 2005). Prior to any preparation for a court appearance, an expert should ensure their report is within their specialised knowledge based on ‘training, study or experience’ (Evidence Act 1995, s. 79). If not, it will be rendered inadmissible from the outset and there will be no opportunity to give oral evidence.

(National Forensic Technology Center 2013)

When an expert witness prepares for trial, this requires more than merely writing a well-structured report. To be sufficiently prepared, the expert should study the material, as it is difficult to answer questions if they are unfamiliar with the report. In saying that, oral testimony is not a memory test, and it is not unusual to refer to the report. Prior to the mock trial, I found it difficult to prepare for because I hadn’t written the report myself. After giving oral evidence, I learnt the importance of always writing your own report because the process of gathering evidence as part of the investigation enables the expert to understand and know its contents.

(Primeau Forensics 2014)

In addition to a thorough and comprehensive knowledge of the report, an expert must be able to explain their evidence succinctly and in plain English. This is important because the jury is not made up of forensic accountants, so evidence must be framed in a way that they can understand. The best way to keep a juror engaged is to get to the point quickly and explain it concisely (Teague 2011, 304). Even where there is no jury, technical jargon should still be avoided to help the judge and barristers understand.

(The Focal Point LLC 2012)

Another issue in the mock trial was that students were inclined to answer in a way that favoured their own report and the client’s position. I learnt that experts must always answer confidently and honestly, even when they think it may harm their client’s case or contradict an aspect of the report. This is in light of the fact that the barrister for each party is trying to interpret evidence in favour of their client (Kolczynski 2016). When I gave oral testimony, the questions asked in cross-examination raised valid points that contradicted my report and favoured the defence’s argument. I was given personal feedback that I responded confidently, recognising my report’s weaknesses. This demonstrated how it can be difficult for an expert to honestly answer questions that may discredit their report.

Overall, the mock trial was a valuable learning experience to help my understanding of the major problems facing an expert witness, and how they can prepare for giving evidence in court.

Relevant Links
If you would like to read more about the five rules of admissibility for expert opinion evidence, you can do so in Chapter 9 here: http://www.alrc.gov.au/sites/default/files/pdfs/publications/ALRC102.pdf

References
Australian Law Reform Commission. 2005. Uniform Evidence Law (ALRC Report 102). Accessed May 25, 2016. http://www.alrc.gov.au/sites/default/files/pdfs/publications/ALRC102.pdf.

Beran, Roy. 2009. “The role of the expert witness in the adversarial legal system.” Journal of Law and Medicine 17(1): 133-137. Accessed May 21, 2016. http://www.westlaw.com.au/maf/wlau/app/document?docguid=I2a88fb96cfdc11e08eefa443f89988a0&tocDs=AUNZ_AU_JOURNALS_TOC&isTocNav=true&startChunk=1&endChunk=1.

Evidence Act (Cth). 1995. Accessed May 25, 2016. https://www.legislation.gov.au/Details/C2016C00363.

Federal Court Rules (Cth). 2011. Accessed May 25, 2016. https://www.legislation.gov.au/Details/F2016C00359.

Kolczynski, Phillip. “Ethical Challenges for Experts in Civil Litigation.” Accessed May 25, 2016. http://expertpages.com/news/ethical_challenges_for_experts_i.htm.

National Forensic Science Technology Center. 2013. “Who can serve as an expert forensic science witness at court?” Image. Accessed May 25, 2016. http://www.forensicsciencesimplified.org/legal/who.html.

Primeau Forensics. 2014. “How to Prepare for Testifying in Court as an Expert Witness.” YouTube video, posted February 27. Accessed May 25, 2016. https://www.youtube.com/watch?v=VBS8o0H6z2Q.

Teague, Carl. 2011. “Experts at Trial.” In Litigators on Experts: Strategies for Managing Expert Witnesses from Retention Through Trial, edited by Wendy Couture and Allyson Haynes, 295-316. Chicago: ABA Book Publishing.

The Focal Point LLC. 2012. “Expert Witness Graphics: Dispelling Myths and Maximising Effectiveness.” Image. Accessed May 25, 2016. http://www.thefocalpoint.com/insights/articles/7/167.

Forensic accountants as expert witnesses

Division 23.2 of the Federal Court Rules (2011) governs expert witnesses and their reports in court. Paragraphs (a) to (d) of section 23.15 were included because the court is required to ensure that cases are ‘brought to resolution quickly, inexpensively and as efficiently as possible’ (Federal Court of Australia 2016). I learnt about how expensive litigation is throughout my law degree, and saw it firsthand when my parents went to court for their divorce settlement. I recognise that the longer it takes for an expert witness to give oral evidence, the higher the court costs and legal fees that will be incurred by the parties to the proceeding.

(Masini Law Group, P.C. 2016)

Expert conferral enables identification of the real issues in dispute, saving time and costs by focusing the hearing on those issues (de Villiers 2015, 93). In addition, it helps to ensure that expert witnesses comply with their duty to the court and do not advocate for their client, as any bias opinion can be challenged by the other party’s expert (de Villiers 2015, 93).

(Clear Retirement Group 2014)

When our company engages a forensic accounting expert witness, they may be required to give evidence in court. If the court orders the expert to confer with another expert pursuant to the Federal Court Rules (2011) section 23(a), they may be ordered to produce a document that identifies where their opinions agree and differ under section 23(b). Given my legal background, I would advise that they understand and comply with Practice Note CM 7. Guideline 3.1 outlines that a witness cannot be given, or accept, instructions not to reach agreement when they meet with another party’s expert (Federal Court of Australia 2013).

Relevant Links
If you would like to read the Federal Court Rules or download a copy, you can do so here:
https://www.legislation.gov.au/Details/F2016C00359.

If you would like to read Practice Note CM 7, you can do so here: http://www.fedcourt.gov.au/law-and-practice/practice-documents/practice-notes/cm7

References
Clear Retirement Group. 2014. “Tale of 2 Businessmen – The High Court of Waiting to Save for Retirement.” Image. Accessed May 25, 2016. http://www.clearretirementgroup.com/clearretirementsense/2014/5/22/c596pzkxqnvm9o4yi4i0z51gx5w1hb.

de Villiers, Bertus. 2015. “Conferral of experts and concurrent evidence: What do experts think?” Law Society of NSW Journal 16: 92-93. Accessed May 16, 2016. http://search.informit.com.au.ezp01.library.qut.edu.au/documentSummary;dn=537379021502219;res=IELAPA.

Federal Court of Australia. “Conference of Experts.” Accessed May 16, 2016. http://www.fedcourt.gov.au/case-management-services/ADR/conference-of-experts.

Federal Court of Australia. 2013. “Practice Note CM 7.” Accessed May 16, 2016. http://www.fedcourt.gov.au/law-and-practice/practice-documents/practice-notes/cm7.

Federal Court Rules (Cth). 2011. Accessed May 16, 2016. https://www.legislation.gov.au/Details/F2016C00359.

Masini Law Group, P.C. “New York Bankruptcy Attorney Explains How Bankruptcy Exemptions are Performed.” Image. Accessed May 25, 2016. https://www.masinilaw.com/new-york-bankruptcy-attorney-explains-how-bankruptcy-exemptions-are-performed/.

Building an ethical culture to minimise fraud, bribery and corruption

Here at the Bank of Australia, we recognise that culture is the biggest cause of fraud, and I want to ensure you understand how we can change this. Culture reflects the values that are shared by individuals in an organisation, and it can influence the decision to engage in fraudulent activities (Omar, Johari and Hasnan 2015, 368). Take Enron for example, which I discussed in my first blog post; one of the major causes of their collapse was the CEO and CFO’s role in creating an unethical corporate culture, where fraud was considered acceptable (Sims and Brinkmann 2003, 247).

When I was working in my first part-time job, some managers would come to work with a negative, disinterested attitude. This affected me and other employees on shift, as we lacked encouragement and motivation as a result, failing to meet our targets. Although this is on a much smaller scale than organisational fraud, it demonstrates how the tone from management flows through to all employees.

(Power of Ted 2014)

Companies continue to ignore the impact of culture, as they focus on internal control measures. Our CEO should use the Australian standard for Fraud and Corruption Control, AS 8001–2008, as an approach to control fraud, bribery and corruption in our company. It emphasises the need to build an ethical culture by implementing an integrity framework, and recognises the importance of senior management’s ‘observable adherence’ to set an example for employees (Standards Australia 2008, 25). As part of this framework, an Ethics Committee should be implemented, and all employees should receive ongoing ethics training. By developing an ethical culture in our organisation, this will help to minimise fraud, bribery and corruption.

(ACFE 2015)

Relevant Links
If you would like to read more about how to build an ethical culture in our organisation, you can do so here:
http://www2.deloitte.com/content/dam/Deloitte/us/Documents/risk/us-aers-corporate-culture-112514.pdf

References
ACFE. 2015. “Tone at the Top According to a Fraudster.” YouTube video, posted January 23. Accessed May 24, 2016. https://www.youtube.com/watch?v=bpg25Y57UYc.

Delloite. 2015. Corporate culture: The second ingredient in a world-class ethics and compliance program. Accessed May 24, 2016. http://www2.deloitte.com/content/dam/Deloitte/us/Documents/risk/us-aers-corporate-culture-112514.pdf.

Omar, Normah, Zulaikha Johari and Suhaily Hasnan. 2015. Procedia Economics and Finance 31: 367-372. Accessed May 15, 2016. doi: 10.1016/S2212-5671(15)01211-3.

Power of Ted. 2014. “Setting the Tone at the Top.” Image. Accessed May 24, 2016. http://powerofted.com/setting-the-tone-at-the-top/.

Sims, Ronald and Johannes Brinkmann. 2003. “Enron Ethics (Or: Culture Matters More than Codes).” Journal of Business Ethics 45(3): 243-256. Accessed May 15, 2016. http://link.springer.com.ezp01.library.qut.edu.au/article/10.1023%2FA%3A1024194519384.

Standards Australia. 2008. Fraud and Corruption Control. AS 8001–2008. Accessed May 15, 2015. http://www.saiglobal.com.

Interviewing techniques for forensic accountants

When our company suspects that fraud has occurred, a forensic accountant will interview potential suspects and witnesses as part of their investigation. They should not conduct the interview without sufficient preparation and making a plan (American Institute of CPAs 2013, 16), and must not argue with the interviewee, make threats or promises, become judgemental, or lose objectivity (AICPA 2013, 16).

Most importantly, forensic accountants must not obtain confessions as the result of ‘duress, intimidation, persistent importunity, or sustained or undue insistence or pressure’, as they must be made voluntarily to be admissible (McDermott v R (1948) 76 CLR 501 at 511). This includes oppressive conditions such as depriving a suspect of food or sleep (Garrett 2010, 1095).

(Cain 2015)

I have no personal experience with investigative interviews, but I recommend that forensic accountants use motivational interviewing. It is a ‘directive, client-centred style for eliciting behaviour change by helping clients to explore and resolve ambivalence’ (Rollnick and Miller 1995, 326). In contrast, the Reid Technique is a more aggressive approach. It begins with a behavioural analysis interview, followed by an interrogation to persuade the suspect to admit their guilt (Cutler 2008). If I was being interviewed, I would feel more intimidated by this technique, and the accusatory tone may lead to a false confession to end the interview quickly.

(Mead Johnson Nutrition 2016)

An alternative approach that I recommend is the PEACE Technique, which is also non-accusatory and less aggressive than the Reid Technique. It focuses on building a rapport to engage the interviewee and determine the facts, rather than merely obtaining a confession (Gudjonsson and Pearse 2011, 34), and would make me feel more comfortable when responding to the interviewer’s questions.

Relevant Links
You can read more about how to conduct an effective interview here: http://www.aicpa.org/interestareas/forensicandvaluation/resources/practaidsguidance/downloadabledocuments/10834-378_interview%20whiite%20paper-final-v1.pdf

References
American Institute of CPAs. 2013. Conducting Effective Interviews. Accessed May 12, 2016. http://www.aicpa.org/interestareas/forensicandvaluation/resources/practaidsguidance/downloadabledocuments/10834-378_interview%20whiite%20paper-final-v1.pdf.

Cain, Nicole. 2015. “The Use of Deception During Police Interrogations.” Image. Accessed May 22, 2016. http://inpublicsafety.com/2015/12/the-use-of-deception-during-police-interrogations-2/.

Cutler, Brian. 2008. “Reid Technique for Interrogations.” In Encyclopedia of Psychology and Law. Accessed May 12, 2016. http://dx.doi.org.ezp01.library.qut.edu.au/10.4135/9781412959537.n262.

Garrett, Brandon L. 2010. “The Substance of False Confessions.” Stanford Law Review 62(4): 1051-1119. Accessed May 12, 2016. http://search.proquest.com.ezp01.library.qut.edu.au/docview/224077578/fulltext/9DB57546A2BA48F4PQ/1?accountid=13380.

Gudjonsson, Gisli and John Pearse. 2011. “Suspect Interviews and False Confessions.” Current Directions in Psychological Science 20(1): 33-37. Accessed May 12, 2016. doi: 10.1177/0963721410396824.

McDermott v R (1948) 76 CLR 501.

Mead Johnson Nutrition. “The Motivational Interviewing Toolkit for the Metabolic Clinician.” Image. Accessed May 22, 2016. https://www.meadjohnson.com/pediatrics/us-en/clinical-support/metabolic-toolkit.

Rollnick, Stephen and William Miller. 1995. “What is Motivational Interviewing?” Behavioural and Cognitive Psychotherapy 23(4): 325-334. Accessed May 12, 2016. http://dx.doi.org.ezp01.library.qut.edu.au/10.1017/S135246580001643X.

Understanding and explaining fraud, bribery and corruption

When fraud is committed by employees in our company, theories and models can help us understand why it occurred. Differential Association theory claims that social behaviour is found in ‘learned attitudes, beliefs or values’ (Donegan and Ganon 2008, 6), explaining that criminal behaviour is learned by others who are engaged in criminal conduct (Salinger 2013). Although I’m not a criminal, I know from experience that it’s human nature to learn behaviour from your peers. In comparison, Strain Theory claims that social problems, including crime, ‘result from the failure of institutions, families and other structures to provide for the functional and affective needs of individuals’, leading to a sense of anomie (Donegan and Ganon 2008, 4). 

Differential Association theory explains why fraud occurs by groups within an organisation, whereas Strain Theory explains why individuals turn to fraud, bribery and corruption. Cressey’s Fraud Triangle is a model that addresses the effect on an individual. It explains that they feel pressure to commit fraud, which is their personal motive, there is an opportunity to commit fraud in the organisation, and the individual rationalises their behaviour (Mackevicius and Giriunas 2013).

(Brumell Group 2015)

I first heard about the Fraud Triangle during my university studies in a subject called Audit and Assurance, where it helped me understand why fraudulent financial reporting and asset misappropriation were committed by employees and management. It can also be used to explain an increase in this behaviour here at the bank of Australia. We can try and reduce this my recognising employee’s pressures such as financial distress, limiting opportunities to commit fraud (Coenen 2016), and building an ethical culture where fraud is less likely to be rationalised.

(Procurement Academy 2014)

References
Brumell Group. 2015. “The Fraud Triangle Theory.” Image. Accessed May 22, 2016. http://brumellgroup.com/news/the-fraud-triangle-theory/.

Coenen, Tracy. “The Fraud Triangle and What You Can Do About It.” Accessed May 12, 2016. https://www.allbusiness.com/the-fraud-triangle-and-what-you-can-do-about-it-4968017-1.html.

Donegan, James and Michele Ganon. 2008. “Strain, Differential Association and Coercion: Insights from the Criminology Literature on Causes of Accountant’s Misconduct.” Accounting and the Public Interest 8: 1-20. Accessed May 9, 2016. http://search.proquest.com.ezp01.library.qut.edu.au/docview/235004989?pq-origsite=summon.

Mackevicius, Jonas and Lukas Giriunas. 2013. “Transformational Research of the Fraud Triangle.” Ekonomika 92(4): 150-163. Accessed May 9, 2016. http://search.proquest.com.ezp01.library.qut.edu.au/docview/1492268000?pq-origsite=summon.

Procurement Academy. 2014. “Fraud Prevention – Cressey’s Triangle.” YouTube video, posted November 24. Accessed May 22, 2016. https://www.youtube.com/watch?v=IK_2oMODNXk.

Salinger, Lawrence. 2013. “Differential Association Theory.” In Encyclopedia of White-Collar and Corporate Crime. Accessed May 9, 2016. http://dx.doi.org.ezp01.library.qut.edu.au/10.4135/9781452276175.n135.

Remaining impartial as a forensic accounting expert witness

Our company is extremely susceptible to fraud, and it is highly likely that we will need to engage a forensic accountant as an expert witness. We must understand that their paramount duty is to the court, and this may conflict with our expectations as their client (Accounting Professional & Ethical Standards Board 2013, 8). When preparing a report, expert witnesses must form an opinion based entirely on specialised knowledge (Hoffman et al. 2013, 46). They are required to act independently and without bias, and a statement that verifies this should be included in the report (Beran 2009, 135).

(Aviation Safety Institute 2016)

All facts and assumptions that were relied on must also be explained in the report, and the opinion should be justified in terms that can be understood by a layperson (Hoffman et al. 2013). It is essential that the expert understands they are not obliged to endorse the client’s position, even if instructed by the lawyer.

I have no personal experience in this area, but if I was an expert witness, I would also be bound by these requirements to avoid prejudice. I think these duties are quite onerous and may be difficult to comply with, particularly because they are being paid by only one party to the proceeding. Despite this, expert witnesses must remain impartial throughout all dealings with their client.

Relevant Links
If you would like to read more about the forensic accountant and their expert report, you can do so here:
http://www.mwforensic.com.au/news/MWCommDispute_Ed3.pdf

References
Accounting Professional & Ethical Standards Board. 2013. Forensic Accounting Services. APES 215. Accessed April 16, 2016. http://www.apesb.org.au/uploads/standards/apesb_standards/13092014103232p1.pdf.

Aviation Safety Institute. “Expert Opinion for Legal Matters.” Image. Accessed April 20, 2016.
http://aviationsafetyinstitute.aero/consulting/expert-opinion-for-legal-matters/.

Beran, Roy G. 2009. “The role of the expert witness in the adversarial legal system.” Journal of Law and Medicine 27 (1): 133-137. Accessed April 16, 2016. http://www.westlaw.com.au.ezp01.library.qut.edu.au/.

Hoffan, Ronnie, Warwick Finney, Phillip Cox, and Kathie Cooper. 2013. The Accountant as an Expert Witness: A basic guide to forensic accounting. CCH Australia.

Munday Wilkinson. 2011. Forensic Accounting for Commercial Disputes. Accessed April 20, 2016.
http://www.mwforensic.com.au/news/MWCommDispute_Ed3.pdf.

Directors' strict liability to address fraud, bribery and corruption

Last year, the Commonwealth Bank notified me that there were several fraudulent transactions on my debit card at a church in the United States. I was the victim of cybercrime, and this happened despite the steps I take to protect my details, highlighting just how easy it is for perpetrators. Our company is increasingly vulnerable as potential victims of white-collar crime and cybercrime, and you should understand what these mean. White-collar crimes are non-violent crimes committed in the course of a person’s work or profession, such as fraud (Polk 1999, 5). Cybercrime is a broad term that encompasses crimes involving computers and other information communications technologies, such as hacking or identity theft (Attorney-General’s Department 2013, 4).

(Swayne 2013) 

The legislature has attempted to minimise these incidences of fraud, bribery and corruption by introducing strict liability to hold directors liable when they are not at fault. Strict liability applies to offences where the prosecution is not required to prove mens rea (Australian Law Reform Commission 2016, 287). As a result, it is essential that directors in our company exercise care and diligence to put adequate controls in place and protect against these offences. This is a mechanism to address the continuing problem in the corporate world, and if directors take all reasonable steps, they are less likely to be held personally liable.

(Clifford Chance 2015)

Relevant Links
To learn more about white-collar crime and why adequate controls are important, you can read about the high-profile case of Joel Morehu-Barlow here:
http://www.theaustralian.com.au/news/nation/fake-prince-joel-morehu-barlow-admits-theft-of-16m-from-queensland-health/story-e6frg6nf-1226600526411

To find out how to protect your credit card, you can read tips from the Commonwealth Bank here:
https://www.commbank.com.au/personal/can/credit-cards/tips-for-credit-card-security.html

References
Attorney-General’s Department. 2013. National Plan to Combat Cybercrime. Accessed April 11, 2016.
https://www.ag.gov.au/CrimeAndCorruption/Cybercrime/Documents/national-plan-to-combat-cybercrime.pdf.

Australian Law Reform Commission. 2016. Traditional Rights and Freedoms Encroachments by Commonwealth Laws. Accessed April 11, 2016. https://www.alrc.gov.au/publications/freedoms-alrc129.

Clifford Chance. 2015. “Directors' duties under Australian law.” YouTube video, posted January 22. Accessed April 19, 2016. https://www.youtube.com/watch?v=e97IiYN2wl0.

Commonwealth Bank of Australia. “Tips for credit card security.” Accessed April 19, 2016.
https://www.commbank.com.au/personal/can/credit-cards/tips-for-credit-card-security.html.

Elks, Sarah. 2013. “Fake prince Joel Morehu-Barlow sentenced to 14 years for theft of $16m from Queensland Health.” The Australian, March 19. Accessed April 19, 2016.
http://www.theaustralian.com.au/news/nation/fake-prince-joel-morehu-barlow-admits-theft-of-16m-from-queensland-health/story-e6frg6nf-1226600526411.

Polk, Ken. 1999. “White collar crime.” Legaldate 11 (2): 5-7. Accessed April 11, 2016.
http://search.informit.com.au.ezp01.library.qut.edu.au/fullText;dn=19994333;res=AGISPT.

Swayne, Matthew. 2013. “White Collar Crime's Glass Ceiling: It's Still a Man's World.” Image. Accessed April 19, 2016.
http://vitaminw.co/business/white-collar-crime-still-boys%E2%80%99-club.