Financial Expert Witness Communication: A Practical Guide to Reporting and Testimony

Praise for Financial Expert Witness Communication Financial Expert Witness Communication is a great resource for those who have an interest in better understanding what it takes to be an expert witness, attorneys hiring financial expert witnesses, as well as experts and attorneys who have been doing it for years and just need a reference book handy. The real–world practical tips, checklists, and advice are invaluable. These are usually obtained through many years of experience and hard knocks, but this book puts these many lessons right on the table. Michael A. Fahlman, Grant Thornton LLP, Forensic and Valuation Services Partner Mr. Prebers book is a terrific and easy–to–use reference guide both for experienced financial expert witnesses that want to review their rudiments in the course of an engagement and for new or relatively inexperienced entrants to the expert witness world. Financial professionals that are considering expert witness work will find helpful insight into what the work requires. I am not aware of another book like it. Bennett W. Lasko, Partner, Drinker Biddle Reath LLP I knew Brad Preber was a financial expert par excellence. And I also knew he was a gifted communicator as well. But in this book, Financial Expert Witness Communication, he has simply hit it out of the ballpark in other words, rephrasing only slightly, read this book, and I guarantee you shall Witness Communication by a Financial Expert! A great resource for those in the field rendering expert witness testimony, whether contemplating it (futureto prepare better), doing it (presentto refine their skills and competencies), or having done it (pastto relive and relish) Dr. Sridhar Ramamoorti, ACA, CPA/CITP/CFF/CGMA, CFE, CIA, CFSA, CRP, CGAP, CRMA, CGFM, MAFF; Director, Corporate Governance Center, and professor of accountancy, Kennesaw State University, Georgia, USA; Chairman, Committee on Governance, Risk, Compliance of Financial Executives International (FEI); member, Standing Advisory Group, Public Company Accounting Oversight Board (PCAOB), 20142016

Disclaimer xiii Foreword xv Preface xix Acknowledgments xxiii PART I: DISPUTE RESOLUTION AND THE FINANCIAL EXPERT Chapter 1: Value of the Financial Expert in Litigation and Dispute Resolution 3 Why Be a Financial Expert Witness? 3 Value of the Financial Expert Witness under Federal Rules 4 Enhancing Value Using the Litigation Process 13 Coming Up 14 Notes 14 Chapter 2: Roles Suited for the Financial Expert 17 The “Big Three”: Liability, Causation, and Damages 17 Financial Expert Assignments 19 Roles for the Financial Expert 20 Matters Suited for the Financial Expert 21 Financial Expert Litigation Services 22 Coming Up 27 Notes 27 Chapter 3: Retention of the Financial Expert 29 Finding Financial Experts 29 Prospective Client Due Diligence 35 Pre–Engagement Communications 39 Selection of the Financial Expert Witness 42 Coming Up 44 Notes 44 Chapter 4: Getting Started as a Financial Expert 45 Getting Started 45 Coming Up 61 Notes 61 Chapter 5: Civil Litigation and Dispute Resolution Processes 63 Civil Litigation Actions and Proceedings 63 Alternative Dispute Resolution 71 Coming Up 72 Notes 72 PART II: FINANCIAL EXPERT RULES, CASE PRECEDENT, AND ETHICS Chapter 6: Federal Rules of Evidence for the Financial Expert Witness 77 Evidentiary Rules on Expert Witness Opinions and Testimony 77 Scientific, Technical, or Other Specialized Knowledge 79 Coming Up 94 Notes 94 Chapter 7: Federal Rules of Civil Procedure for the Financial Expert Witness 97 Procedural Rules on Expert Witness Reporting and Testimony 97 Coming Up 105 Note 105 Chapter 8: Basic Litigation Knowledge for the Financial Expert Witness 107 Laws and Rules 107 Legal Precedent 113 Orders 117 Court Rules and Policies 121 Privileged Communications 121 Professional Standards 122 Coming Up 122 Notes 122 Chapter 9: Professional Ethics Considerations 125 Professional Ethics 125 Ethical Considerations for the Financial Expert Witness 130 Trial 133 Coming Up 136 PART III: FINANCIAL EXPERT WITNESS REPORTS AND TESTIMONY Chapter 10: Preparing the Financial Expert Witness Report 139 Federal Rules on Financial Expert Witness Disclosure 139 A PRACTICAL Way to Prepare a Financial Expert Report 140 Organization of the Financial Expert Witness Written Report 143 Writing the Financial Expert Witness Report 145 Caveats to Consider 149 Exhibits 153 Quality Control for Financial Expert Witness Reports 154 Coming Up 156 Notes 156 Chapter 11: Rebutting the Financial Expert Witness Report 157 The Financial Expert Rebuttal 157 Steps for an Effective Rebuttal 157 Case Study: Exclusion of the Financial Expert Witness 171 Risks of Having Only Rebuttal Opinions 174 Coming Up 174 Notes 174 Chapter 12: Discovery Using Deposition 177 What Is a Deposition? 177 Deposition Objectives 185 Coming Up 187 Chapter 13: Financial Expert Witness Deposition Preparation 189 Preparation for Deposition 189 Expected Deposition Questions 192 Confer with Client Legal Counsel 200 Leading Up to Deposition 203 Coming Up 204 Chapter 14: Financial Expert Witness Deposition Testimony 205 Deposition Testimony 205 Post–Deposition Activities 225 Coming Up 227 Notes 227 Chapter 15: The Financial Expert Witness and Motions and Hearings 229 Motions 229 Hearings 235 Coming Up 236 Notes 236 Chapter 16: Financial Expert Witness Trial Testimony 237 Types of Trials 237 Components of Trial Examination 238 Preparation for Trial Testimony 239 Objections 248 Coming Up 250 Notes 250 Chapter 17: Financial Expert Witness Direct Examination 253 Direct Examination 253 Direct Examination Outline 258 Trial Demonstratives 259 Preemptive Cross–Examination 260 Use of the Expert Report in Trial 261 Redirect Examination 261 Rebuttal Testimony 262 Coming Up 262 Notes 262 Chapter 18: Financial Expert Witness Cross–Examination 263 Cross–Examination 263 Objectives of Cross–Examination 264 Cross–Examination Techniques 268 Ten Commandments of Cross–Examination 272 Surviving Cross–Examination 274 Re–Cross–Examination 277 Coming Up 277 Notes 278 PART IV: ALTERNATIVE DISPUTE RESOLUTION Chapter 19: Alternative Dispute Resolution: Mediation 281 Mediation Process 281 Financial Expert Participation in Mediation 282 Mediation Activities 284 Coming Up 288 Notes 289 Chapter 20: Alternative Dispute Resolution: Arbitration 291 The Arbitration Process 291 Structure of Arbitration 292 Arbitration Activities 293 Financial Expert Participation in Arbitration 300 Coming Up 301 Chapter 21: Alternative Dispute Resolution: Neutral Accounting Arbitration 303 Neutral Accounting Arbitration 303 Neutral Accounting Arbitration Process 304 In Closing 312 Bibliography and Suggested Reading 313 About the Author 317 About the Website 319 Index 321

BRADLEY J. PREBER, CPA, CFF, CFE, is the National Managing Partner of Grant Thornton LLPs Forensic and Valuation Services Practice. With more than 30 years experience, he has prepared numerous expert reports as an accounting, financial, fraud, and/or damage expert and has testified in federal court and state courts. Preber is the primary author of the AICPAs Introduction to Civil Litigation Services, and he has instructed National Institute of Trial Advocacy (NITA) programs.