How to Work With a Financial Expert Witness | What to Send Your CPA Expert
HP Accounting Expert Witness: How I Work With Attorneys
When you hire a financial expert, you shouldn’t have to guess what to send. Here’s how I make it efficient – so you don’t pay me to read 100,000 pages twice.
I have 35 years as a CFO/CPA and I’m also a California attorney. I understand privilege, discoverability, and how to lay a foundation under Evidence Code 1271.
1. What to Send at the Start
I can get started with:
- Complaint, answer, and any case status report or trial brief
- Key financial statements, tax returns, general ledger
- Bank statements, POS data, sales tax returns (if cash-intensive business)
- Prior valuations, business appraisals, or opposing expert reports
- Correspondence that gives context to the transaction
If you have it, a chronology or chart/table of contents helps. I will tell you within a day if we’re missing something critical.
2. Discovery Disputes I See All the Time
Almost always, the documents needed for financial analysis are not privileged. Privilege protects attorney work product and attorney/client communications. Documents prepared prior to litigation in the ordinary course of business must be disclosed.
The biggest example: tax returns being withheld. Under PALOMBA WEINGARTEN v. SUPERIOR COURT OF SAN DIEGO COUNTY and its progeny, tax returns are discoverable in financial litigation because the information is more reliable in a tax return and isn’t available elsewhere. Standard practice is to redact SSNs, DOBs, and similar identifiers before producing.
I draft document requests that actually get what we need – not “all financial documents” but specific POS reports, merchant account statements, payroll registers, etc.
3. Too Much Information vs Not Enough
I’ve received over 100,000 pages on a single engagement. When it’s 12 bankers boxes of bank statements without coding keys or context, it’s not useful and it’s expensive for you.
My triage system:
- First pass: Top-level view – what are the damages theories, what period, what documents tie to that theory
- Second pass: Detailed tracing/summarizing only where needed – forensic cases where we follow the money
- Organization: I use an assistant to index and a table of contents so you don’t pay CPA rates for organizing
One scenario where that level of detail is essential is forensic tracing and partnership accounting – then we do need every statement. But I still need the story first.
4. The Right Amount and Type
It is always a balance. Without enough information I cannot reach a conclusion to a reasonable degree of accounting certainty. With too much unstructured information, the cost goes up and the opinion gets buried.
If you’re an attorney with a business valuation, forensic, or CPA malpractice matter, send me what you have. I will send you back a targeted request list and a budget for the analysis, with workpapers in a form that survives a Sargon challenge.
Bob Bates, CPA, CVA, CFE, Esq.
Former CFO, Controller, Board Member | Expert Witness
Contact: hpaccounting.com/contact
HP Accounting expert witness