APES 215 - Forensic Accounting Services

The Accounting Professional & Ethical Standards Board (APESB) is an independent body which sets out the code of ethics and professional standards by which members of Australia’s professional accounting bodies must abide. The standards set by APESB provide an outline of the fundamental responsibilities of professional accountants when performing their roles. These standards are fundamental to the reputation of the accountancy profession and to ensure consistency of practice.

APESB announced in 2009 the introduction of a new standard, APES 215 – Forensic Accounting Services (the Standard) to provide a guideline for accountants working in forensic services including Expert Witness Services, Lay Witness Services, Consulting Expert Services and Investigation Services (APESB, 2009). The new standard for forensic accountants provides greater certainty and consistency for business and the accounting profession in how professional accountants provide forensic accounting services (New standards for forensic accountants, 2009).

The Standard provides fundamental responsibilities which members of the Standard shall comply with. These include:

Professional Independence per items 3.5 to 3.10, in particular item 3.5 which requires independence when engaged to perform a Forensic Accounting Service. The definition of independence is outlined below:

a)   Independence of mind - the state of mind that permits the provision of an opinion without being affected by influences that compromise professional judgment, allowing an individual to act with integrity, and exercise objectivity and professional scepticism; and

b)   Independence in appearance - the avoidance of facts and circumstances that are so significant a reasonable and informed third party, having knowledge of all relevant information, including any safeguards applied, would reasonably conclude a Firm’s, or a member’s, integrity, objectivity or professional scepticism had been compromised.

Professional Competence and Due Care per items 3.11 to 3.16 requires that Forensic Accounting Services generally require a Member to have specialised training, study or experience before accepting an engagement or assignment.

Confidentiality per items 3.17 to 3.18 outlines that members who acquires confidential information in the course of professional work for a client or employer, shall not use the information for any purpose other than for professional work.

In addition to the above fundamental responsibilities, the Standard outlines specific expert witness services responsibilities, duties and how to structure an expert witness report. Section 5, in particular item 5.4 outlines the duties of an expert witness which are:

a)   The paramount duty to the Court which overrides any duty to the client or employer;

b)   A duty to assist the Court on matters relevant to the member’s area of expertise in an objective and unbiased manner;

c)   A duty not to be an advocate for a party;

d)   A duty to make it clear to the Court when a particular question or issue falls outside the member’s expertise.

Additional item 5.6 outlines the legal requirements and restrictions providing an expert witness service shall communicate in any report. These include:

Item 5.6 of APES 215 - Forensic Accounting Services

Further Readings:

Accounting Professional and Ethical Standards Board. (2008). APES 215 Forensic Accounting Services, item 3.12 – Professional competence and due care. Retrieved from: http://www.publicaccountants.org.au/media/32890/apes%20215%20standard_1.pdf

Accounting Professional & Ethical Standards Board. (2011). Frequently asked questions. Retrieved from: http://apesb.org.au/uploads/apesb-information-uploads/c_apesbfaq-19-05-11.pdf

New standards for forensic accountants. (2009). Intheblack, 79(2), 45. Retrieved from: http://search.proquest.com.ezp01.library.qut.edu.au/docview/211279933