Reflective Writing Task - Blog #5

Reflective Writing Task - Blog #5

I agree with the statement that an important part of the forensic accounting role is the quantification of damages in the civil courts when a person has been wronged. 

According to the Forensic CPA Society, engagement relating to civil law disputes includes;

• The calculation and the quantification of losses and economic damages
• Any disagreements relating to company acquisitions, for example of breach of warranties, and
• Business valuation, (n.d.).

Upon my research into the complexity of the forensic accounting role when considering civil action law, I came across the Labelmakers Group Pty Ltd v LL Force Pty Ltd [2012] FCA 512 case.  Labelmakers claimed a number of employees were in conflict of their contractual and fiduciary obligations to the company, (Federal Court of Australia, 2012). The forensic accountants assigned to this case were responsible for the quantification of damages based upon the applicants claim for compensation for a loss on profit on multiple counts.  

Following on from this example, a forensic accountant must also consider different elements to the law of damages, including taxation.  In the case stated above, to ensure a true figure was derived in relation to the calculation of the damages, it is required taxation be accounted for, (Hines, 2008).  

References

Labelmakers Group Pty Ltd v LL Force Pty Ltd (No 2) [2012] FCA 512. (2012). Federal Court of Australia. Retrieved from https://jade.io/article/265542

Forensic CPA Society. (n.d.) What is a Forensic Accountant? Accessed April 10, 2017. https://www.fcpas.org/about-us/what-is-a-forensic-accountant/

Hines, M. (2008). Tax Implications of Litigation. Victorian Bar Professional Standards Scheme. Retrieved from http://www.deverslist.com.au/Tax%20Implications%20of%20Litigation.pdf