a.

 

A forensic audit is an examination and evaluation of a firm's or individual's financial records to derive evidence that can be used in a court of law or legal proceeding. Forensic auditing is a specialization within the field of accounting, and most large accounting firms have a forensic auditing department. Forensic audits require the expertise of accounting and auditing procedures as well as expert knowledge about the legal framework of such an audit.

Forensic audits cover a wide range of investigative activities. A forensic audit may be conducted to prosecute a party for fraud, embezzlement, or other financial crimes. In the process of a forensic audit, the auditor may be called to serve as an expert witness during trial proceedings. Forensic audits could also involve situations that do not involve financial fraud, such as disputes related to bankruptcy filings, business closures, and divorces.

Forensic audit investigations can uncover, or confirm, various types of illegal activities. Usually, a forensic audit is chosen, instead of a regular audit, if there's a chance that the evidence collected would be used in court. Below, instances that could necessitate a forensic audit:

Corruption or Fraud

In a forensic audit, an auditor would be on the lookout for

Conflicts of Interest—when a fraudster uses his or her influence for personal gains to the detriment of the company. For example, if a manager allows and approves inaccurate expenses of an employee with whom he has personal relations.

Bribery—offering money to get things done or influence a situation in one’s favour.

Extortion—the wrongful use of actual or threatened force, violence, or intimidation to gain money or property from an individual or entity.

Asset Misappropriation

This is the most prevalent form of fraud. Examples include: misappropriating cash, submitting falsified invoices, making payments to non-existent suppliers or employees, misusing assets (like company equipment), and stealing company inventory.

Financial Statement Fraud

A company can get into this type of fraud to try to show that its financial performance is better than it actually is. The goal of presenting fraudulent numbers may be to improve liquidity, ensure that C-level executives continue to receive bonuses or to cope with the pressure to perform.

 

b.

The stages of civil proceeding may be broadly categorized into the following stages:

(1) Pre-trail stage

(2) Trail Stage

(3) Post trial stage

If a proceeding does not commence on the presentation of plaint it is not a suit even if a judgment may be passed in such proceeding. Plaint is considered to be document by presentation of which in a civil court, a party seeks relief from such court.

Summon: Once the suit is filed successfully a summon is to be issued upon the defendant to appear on a date specified in the summon to appear and answer the claim.

Filing Written Statement:

If the summon is duly served upon the defendant and a written statement containing the answer of the claim of plaintiff and his own claim is to be submitted to the court on the date fixed on the summon. Filing of written statement is obligatory and non-filing of written statement will be considered as of the facts by the defendants

First Hearing:

If the Alternate Dispute Resolution process fails the court shall proceed from the stage at which the suit stood before the decision of ADR. At this stage court will examine the pleadings of the parties and try to determine the core of dispute.

Framing Issues:

At this stage the court will determine the issue of the suit. Issue arises When material proposition of fact and law is affirmed by one party and Denied by the other party.

After framing issue the court may give order on application of the parties With regard to the delivery and answering of interrogatories, the admission of document and facts, and the discovery, inspection, production, impounding and return of documents or other material objects producible as evidence.

Settling Date (SD):

Now the court settles a date for peremptory hearing that is date for trial.

Trial Stage:

Opening the case:

It is the right of the plaintiff to open the case and at this stage the plaintiff states the nature of the case, issue in the case, evidence of the witnesses.

Peremptory Hearing (P H):

At this stage the plaintiff and defendant examine their own witness and Cross-examine the witnesses of the other and may re-examine the witness.

Argument:

After hearing the evidence of the witness of both parties the respective pleaders will be called upon to argue their case.

Post-trial stage:

Pronouncement of judgment:

Once the hearing is complete the court will pronounce judgment at once or reserve the judgment for future date. Every judgment contains

(i) a concise statement of the case

(ii) points for determination

(iii) decision thereon

(iv) reasons for decision.

Decree:    

By the words of decree the court specifically determines and pronounces the rights of the parties in the present dispute.

Execution of decree:

This is the last stage of a civil proceeding and by application of the decree holder the court takes necessary step to execute the decree.

The question of arrest and detention in the civil proceeding may come either at the trial stage or at the post trial stage. Apart from the two parties namely plaintiff and defendant in civil suit the existence of witness is indispensable for delivery of justice. So the plaintiff, defendant and witness are the role characters in a civil suit.

c.

 

Generally, describes the standard that a party seeking to prove a fact in court must satisfy to have that fact legally established. There are different standards in different circumstances. For example, in criminal cases, the burden of proving the defendant’s guilt is on the prosecution, and they must establish that fact beyond a reasonable doubt. In civil cases, the plaintiff has the burden of proving his case by a preponderance of the evidence. A "preponderance of the evidence" and "beyond a reasonable doubt" are different standards, requiring different amounts of proof.

The burden of proof is often said to consist of two distinct but related concepts: the burden of production, and the burden of persuasion.

Standards

Depending on the jurisdiction and type of action, the legal standard to satisfy the burden of proof in U.S. litigation may include, but is not limited to:

beyond a reasonable doubt

clear and convincing evidence

preponderance of the evidence

probable cause

reasonable belief

reasonable indications

reasonable suspicion

some credible evidence

some evidence

substantial evidence

 

d.

 

An expert witness, particularly in common law countries such as the United Kingdom, Australia, and the United States, is a person whose opinion by virtue of education, training, certification, skills or experience, is accepted by the judge as an expert. The judge may consider the witness's specialized (scientific, technical or other) opinion about evidence or about facts before the court within the expert's area of expertise, to be referred to as an "expert opinion". Expert witnesses may also deliver "expert evidence" within the area of their expertise. Their testimony may be rebutted by testimony from other experts or by other evidence or facts.

In the United States, under the Federal Rule of Evidence 702 (FRE), an expert witness must be qualified on the topic of testimony. In determining the qualifications of the expert, the FRE requires the expert have had specialized education, training, or practical experience in the subject matter relating to the case. The expert's testimony must be based on facts in evidence, and should offer opinion about the causation or correlation to the evidence in drawing a conclusion.

Experts in the U.S. typically are paid on an hourly basis for their services in investigating the facts, preparing a report, and if necessary, testifying during pre-trial discovery, or at trial. Hourly fees range from approximately $200 to $750 or more per hour, varying primarily by the expert's field of expertise, and the individual expert's qualifications and reputation. In several fields, such as handwriting analysis, where the expert compares signatures to determine the likelihood of a forgery, and medical case reviews by a physician or nurse, in which the expert goes over hospital and medical records to assess the possibility of malpractice, experts often initially charge a flat fixed fee for their initial report. As with the hourly fees discussed previously, the amount of that flat fee varies considerably based on the reviewing expert's field, experience and reputation.

The expert's professional fee, plus his or her related expenses, is generally paid by the party retaining the expert. In some circumstance the party who prevails in the litigation may be entitled to recover the amounts paid to its expert from the losing party.

Scientific evidence

In law, scientific evidence is evidence derived from scientific knowledge or techniques. Most forensic evidence, including genetic evidence, is scientific evidence.

Frye test

The Frye test, coming from the case Frye v. United States (1923), said that admissible scientific evidence must be a result of a theory that had "general acceptance" in the scientific community. This test results in uniform decisions regarding admissibility. In particular, the judges in Frye ruled that:

Just when a scientific principle or discovery crosses the line between experimental and demonstrable stages is difficult to define. Somewhere in this twilight zone the evidential force of the principle must be recognized, and while courts will go a long way in admitting expert testimony deduced from a well-recognized scientific principle or discovery, the thing from which the deduction is made must be sufficiently established to have gained general acceptance in the particular field in which it belongs.

In 1923, the case of Frye v. United States instituted significant change to both criminal and civil law by addressing the use of expert witness testimony in conjunction with scientific testimony. In Frye v. United States, the defense team attempted to introduce both the results of a polygraph test administered to Frye to determine Frye's innocence as well as the testimony of an expert witness to verify and explain the results.

However, the court rejected the expert's testimony, ruling that: “While courts will go a long way in admitting expert testimony deduced from a well-recognized scientific principle or discovery, the thing from which the deduction is made must be sufficiently established to have gained general acceptance in the particular field in which it belongs.”

Through this ruling, the judge's opinion on Frye v. United States set precedent and the standard by which expert witnesses would be utilized in the court system for years to come. In the federal courts, between 1948 and 1975, Frye was cited 55 times; however, the use and application was not consistent.[5] One of the major struggles that came out of this precedent was the application to both civil and criminal cases. Many of the courts and judges had trouble interpreting the "general acceptance" notion of a particular field in a concise and non-arbitrary manner.

Daubert standard

The Daubert standard arose out of the Supreme Court of the United States case Daubert v. Merrell Dow Pharmaceuticals, Inc.. It requires four things to be shown:

That the theory is testable (has it been tested?)

That the theory has been peer reviewed, (Peer reviewing usually reduces the chances of error in the theory)

The reliability and error rate (100% reliability and zero error are not required, but the rates should be considered by the trial judge)

The extent of general acceptance by the scientific community

The Federal Rules of Evidence use the Daubert Test. See FRE 702.

The Federal Rules of Evidence

In 1975, the United States Congress issued the Federal Rules of Evidence (FRE). FRE 702 was issued to provide a standard for expert witness testimony to be upheld by the United States court system. The rule specified that the application of expert witnesses had to be attributed to a person with “scientific or technical knowledge,” in conjunction with a list of qualifications that would quality one to be an expert in terms of “knowledge, skill, experience, training or education”. This rule thus clarified the acceptable use of expert witnesses in both criminal and civil cases.

However, FRE 702 still left some courts in confusion. The courts and subsequently the judges who would use this new rule were confused as to whether FRE 702 served to bolster the "general acceptance" ruling in Frye or if FRE 702 was the replacement of this rule. For instance, in U.S. v. Williams, the Second Circuit responded that “the applicable considerations [for expert witness testimony] are ‘probativeness, materiality, and reliability of the evidence on the one side, and any tendency to mislead, prejudice or confuse the jury on the other.’” The court rejected the evidence brought by the defense as “junk science,” and therefore, appeared to reject the previous precedent set by Frye on “general acceptance”. This ruling and rational in the Williams case was later adopted by other federal courts, including the Third Circuit. Consequently, in 1984, the Third Circuit cited Williams in U.S. v. Downing, which adopted the “reliability” test in lieu of Frye's “generally accepted” test. Meanwhile, other federal courts stuck to the Frye precedent, causing a stark rift in the Circuit Court system.