The primary determinant of data collection for a forensic accountant hinges on the scope of work involved in the engagement. As directed by Rufus et al. (2015), “much depends on the specifics of the engagement (such as scope limitations and time constraints), the analytical strategy, available resources, and the forensic accountant’s experience.” In this regard, forensic accountants are mandated by AICPA Rule 201 and Rule 702 of the Federal Rules of Evidence, because the expert opinion of a forensic accountant must be based on sufficient relevant data. Although the type of data is essential, “analysis, along with interpretation, is necessary for the development of meaningful conclusions (Rufus et al. (2015).” Concurrently, forensic accountants will collect data that relates to the subject of the engagement, which can either be qualitative or quantitative in nature.
To ensure that the data collected is sufficient, relevant, and required, forensic accountants, look for elements like contextual detail in an effort to develop a complete and clear picture of the case evidence. Data is collected and broken down into smaller, manageable pieces to understand what the information is saying or uncover a pattern or trend. Rufus et al. (2015) indicate that data analysis is “strategic in nature” and should not be conducted indiscriminately. Instead, the working hypothesis or theory should be refined through data analysis, which has a well-defined purpose, deployed with care, and performed through a systematic process.
Talyiah, I agree with your opinion on factors that determine the types of data that you will analyze. As you mentioned, “the specifics of the engagement, the analytical strategy, available resources, and the forensic accountant’s experience” determine what kind of data the forensic accountant will collect and analyze.
I also agree with you that forensic accountants should collect elements that provide contextual details to provide a comprehensive and clear picture. Yet, a forensic accountant should also ensure that he or she has the capacity to make use of all available data sources and sift key information, and he or she should ensure that all data is collected through reliable and legitimate methods. Otherwise, a forensic accountant might cannot ensure that his or her collected data is comprehensive, reliable, and sufficient. As Rule 702 of the Federal Rule of Evidence state, “the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue”. This item demonstrates the significance of a forensic accountant’s competency. Furthermore, Rule 702 also emphasize that testimony should be based on sufficient and relevant facts or data that are collected based on reliable principles and methods. This item indicates the significance of adopting reliable methods to collect data. To large extent, a reliable method is a precondition of obtaining reliable data.
