The 10 Unimpeachable Commandments Reviewed by Momizat on . Practical Applications in Unimpeachable Neutrality Expert witnesses in the fields of forensic accounting, matrimonial litigation, and business valuation must po Practical Applications in Unimpeachable Neutrality Expert witnesses in the fields of forensic accounting, matrimonial litigation, and business valuation must po Rating: 0
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The 10 Unimpeachable Commandments

Practical Applications in Unimpeachable Neutrality

Expert witnesses in the fields of forensic accounting, matrimonial litigation, and business valuation must possess a thorough understanding of the applicable standards, case law, evidentiary rules, and regulations specific to each engagement to effectively help the court understand the facts and evidence. The already daunting task of interpreting these rules becomes increasingly fleeting when those parameters act as moving targets whose relevance or obsolescence may be subject to change in an instant based upon legal decisions, newly promulgated standards, or pronouncements. This third article from the unimpeachable neutrality series, discusses 10 time tested and unimpeachable commandments for practical application in pursuit of the ‚Äúright number‚ÄĚ.

[su_pullquote align=”right”]Resources:

Expert Witness Bootcamp

How to Identify and Manage Malpractice Risks in Your Role as an Expert Witness

The Power of Neutrality in Resolving Family Law Disputes

Industry Standards Update

The Expert‚Äôs Role in Financial Litigation‚ÄĒReal-World Guidance for Managing the Engagement



Imagine watching Monday night football and your team returns from halftime only to learn that passing the ball will no longer be allowed and subject to the results of the Raiders game, the team on offense will now only have three downs instead of four.  For many financial experts, this Twilight Zone moment, filled with game changing rule modifications and evolving standards is a very real reality.  It is this fifth dimension beyond that which is known to man, where you will find financial experts trying to keep up with the latest standards, case law, rules, and regulations.  Expert witnesses who specialize in financial disciplines must deal with a multitude of tenets, rules, and laws that are enacted, amended, superseded, modified, relaxed, abandoned, or otherwise tinkered with every day.  The already daunting task of interpreting these rules becomes increasingly fleeting when those parameters act as moving targets whose relevance or obsolescence may be subject to change in an instant based upon legal decisions, newly promulgated standards, or pronouncements.  The pathology of most rules issued by or under NACVA, AICPA, FASB, PCAOB, SEC, or USPAP purview tends to follow a path premised out of a general necessity to achieve an objective (transparency), reduce a common risk (fraud), or mitigate an undesirable result (material misstatement).  Beneath this complex quilt of codified tenets, laws, and standards, is an underlying objective to reliably calculate and adequately present…the right number.

This third article from the unimpeachable neutrality series discusses 10 time tested and unimpeachable commandments for practical application in pursuit of the ‚Äúright number‚ÄĚ.

  1. Thou Shall Obtain and Use Sufficient, Relevant, and Reliable Data

Financial experts should obtain and use sufficient, relevant, and reliable data in the formation of their expert opinions of damages or value.  Identifying, requesting, and/or relying upon the most sufficient relevant data will always be prerequisite to determining the right number, value, or amount.  This step is critical in applying the scientific method, which entails that data is gathered, reviewed, and analyzed to arrive at a valid conclusion.  Your conclusion is only as reliable as the data you considered or used to arrive at said conclusion.  Despite that being relatively simple to follow, many experts disobey this commandment and choose to ignore or are instructed to ignore sufficient, relevant, and reliable data.  Instead, these experts will use insufficient irrelevant data to form the basis of their opinion.  Note that obtaining the most sufficient relevant data is not, for a lack of better words, sufficient by itself.  One must also use or at least consider this sufficient relevant data to be in accordance with this commandment.  In all cases, sufficient relevant data should come from the most reliable source available or that can be made available through subpoena.  Data that originates from third parties (like a W-2) is generally a more reliable data source than data derived from a tax return.  However, data submitted to a government body like the IRS on a tax return is more reliable than a spreadsheet prepared by Bob in the accounting department of the monied spouse’s business.  When what is provided to you does not satisfy your professional skepticism, direct the attorney to subpoena the information or financial data in another form.

  1. Thou Shall Consider All Relevant Facts and Evidence

Financial experts should consider all relevant facts and evidence in the formation of their expert opinions of damages or value.  Identifying, requesting, and relying upon the most sufficient relevant data is only possible if you have a solid grasp of the facts and evidence as they stand at the current date.  The first thing you should request from the attorney retaining you as an expert is the pleadings and discovery requests sent and received to date.  The pleadings are formal written statements made by either the Plaintiff or Defendant like a complaint or response to the complaint.  Discovery may come in the form of requested documents, requests for admission, or questions (interrogatories) directed at a party to litigation (husband, wife, plaintiff, or defendant) that are meant to help establish what a party to litigation knows, facts of the case, as well as the other sides’ position as to what they consider to be the facts of the case.  The facts and evidence discovered during the discovery process will help you gain a full understanding of the matter at hand, types of damages or fraudulent activity claimed, as well as any disputed (or stipulated) facts.  Facts may be disputed or stipulated but must, at minimum, be understood to properly give consideration to anything that could be used to delegitimize your opinion as to an amount, assessment of damages, or conclusion of value.  When assisting a client in the property settlement phase of matrimonial litigation, the financial disclosure of the business-owning spouse may contain the separate property claims likely to be argued, relevant bank accounts (and bank relationships) that may exist, and possibly non-operating assets listed separate from the business.  While many attorneys will attempt to filter the facts and evidence you are provided, the financial expert must know what facts and evidence are necessary and relevant to complete an assignment.  Over time, a financial expert should become astute and knowledgeable of the additional things that are or could be relevant to what you have been retained or appointed to do.  If you are asked to compute or rebut economic damages, some additional facts or evidence that may not be provided initially are:

  • Whether the Plaintiff had a work disability prior to or after an injury, death, or termination.
  • Does the W-2 wage of the Plaintiff contain non-recurring severance pay, unused vacation, or other supplemental pay that would not have normally been received but for the injury, death, or termination.

If you are asked to value a business within a marital estate, some additional facts or evidence that may not be provided initially are:

  • Ownership interest owned or received as gifts prior to, during, and after the marriage. This information may be overlooked or not deemed as relevant.¬† State specific issues and case law may make this a question that is always relevant.
  • Elements of goodwill. Many states treat personal goodwill as separate property.¬† Clients may swear on their mother‚Äôs grave that the business is worthless until you show them that it has value in the form of separate property classified as nontransferable goodwill which is attributable to them.
  1. Thou Shall Disclose All Materially Relevant Facts and Assumptions Used

Financial experts should disclose all materially relevant facts and assumptions used in the formation of their expert opinions of damages or value.  Whether you are writing an expert damage report or a valuation report, disclosure of anything that is material or relevant to understanding or determining how an expert or analyst actual got to the right number is a steadfast practice that financial professionals and experts alike should live by.  Even if disclosure is not necessarily required, absent something being collateral source or prejudicial, you will rarely be punished for disclosing the relevant facts and underlying assumptions used, applied, or considered by you to determine or present the right figures.  Adequate and transparent disclosure is a general requirement embedded in most rule or standard based literature relevant to financial professionals.  NACVA valuation standards, for example, have very robust reporting standards that in themselves act as a sort of mechanism for compliance and set a clear and concise standard for what should be disclosed in the report.

  1. Thou Shall Make Effective Communication a Priority

Financial experts should make effective communication a priority.  Effective communication is essential in all expert engagements.  While hindsight may always be 20-20, it will be considered oversight if those listening just do not get what you are trying to say.  Obtaining the right number is worthless if you cannot explain how you arrived at it.  Even if you are a consulting witness hired simply to assist in drafting deposition questions for the opposing expert, a failure to communicate the objectives of your suggested line of questioning can be just as detrimental as if you were on the stand or in deposition yourself.  Sometimes you must be very clear that you want your client to ask these questions in the exact order you have them listed.  Communication at trial is inherently important, as your testimony is what the jury will see and will rely upon to understand the evidence.  When you are being deposed, the answers you give are recorded and transcribed by a court reporter.  All court reporters are different and use various methods to record your testimony.  Some repeat everything you say into a mask while some type or record what you say.  Some court reporters even record everything you do at the deposition.

Q: Would you agree, Mr. Meyers, that if the Plaintiff were assumed to have a work disability that your calculations would be wrong (slaps table)?

A: No sir, (Slowly exhales, hair glistening like sunlight on the driven snow) my calculation would still be correct as it was prepared based upon the assumption that the Plaintiff did not have a work disability before or after the alleged actions of the Defendant.  I have not been advised of or instructed to assume such facts, but will gladly perform that separate and distinct calculation should the court deem it warranted based upon the facts and evidence adduced (Cheshire cat grin).

While most court reporters are not as detailed as the exaggerated example above, you cannot assume they will record everything you say properly.  I like to look directly at the court reporter when explaining a complex theory or detailed part of a calculation.  There is nothing wrong with slowing your testimony down for the court reporter when noting that “on Schedule 1a (pause) in Column G (pause) Line 2 (pause) I have calculated the R Squared (pause) attributable to this iteration of regression analysis.  This not only helps to ensure the testimony is properly recorded, but also shows opposing counsel that you know what you are doing and have done this before.

  1. Thou Shall Not Advocate for Anything Other than their Expert Opinion

Financial experts should not advocate for anything other than their expert opinion of damages or value.  Not to beat a dead horse, but you should not be an advocate for anything other than your expert opinion.  There is no tolerance for bias or team spirit in the courtroom or in the eyes of the IRS.  Your integrity is nothing more than a fancy word that means how much of what you say can we believe or trust.  Given the fact that an expert witnesses key role involves testifying, the last thing a financial expert should ever want to do is have any client, court, or fellow professional lose faith in what they say.  Guard your integrity at all costs, your career as an expert depends upon it.

  1. Thou Shall Admit Mistakes and Fallibility

Financial experts should admit mistakes and fallibility in pursuit of the truth.¬† Mistakes are inevitable.¬† If you are hired as an expert witness in enough cases, you will eventually make a mistake.¬† It does not matter how many people proofread your report or how many hours you spend calculating and recalculating the math.¬† It is just plain foolish to pretend that you will never make a mistake in an expert report or on the stand, and even more foolish, not be prepared for the inevitable.¬† While an inexperienced attorney will be quick to point out a mistake during your deposition, the experienced attorney will throw soft ball questions at you during deposition intentionally only to wait until trial to point out the fact that your ten-year average is omitting a year or three.¬† If opposing counsel points out a legitimate mistake at trial or deposition, have no fear, just own up to it.¬† Admit that you, the expert, made a snafu, but only after you verify that said snafu is in fact an error.¬† While you are recalculating, be sure to also assess the materiality of the error.¬† If the attorney cross-examining you wants to make a mountain out of a molehill, let them.¬† Juries tend to frown on attorneys that waste time touting the fact that you spelled the word ‚ÄúSchedule‚ÄĚ incorrectly.¬† Your attorney can rehabilitate you by asking a set of questions that help emphasize exactly how immaterial the error was and whether this error has changed the primary assumptions or ultimate opinion of value or damages to a material degree.

  1. Thou Shall Always be Prepared

Financial experts should always be prepared.¬† Though an expert should never see themselves as infallible, they should never be complacent with mistakes and prepare for trial or deposition with the same diligence you had when pursuing you first love.¬† No matter how sure you are of the accuracy contained within a report of your expert opinion, there is no need to take the risk of an error not being caught prior to trial.¬† Federal Rule 26(e), notes a duty to ‚Äúsupplement or correct‚ÄĚ an expert report ‚Äúif [a] party learns that in some material respect the [expert report] is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.‚ÄĚ ¬†While this is not an ideal situation, I would much rather recalculate a mistake or modification to an existing report on my own time instead of in front of a jury of your peers or a family law judge, neither of which are thrilled to be there.

  1. Thou Shall Not Speculate Beyond that Which is Necessary to Inform the Court

Financial experts should not speculate beyond that which is necessary to inform the court.  Financial experts have a unique role of quantifying intangible things like damages and business value.  These things are inherently a little speculative because, unlike $100 bills, they simply cannot be counted and placed neatly into your wallet.  This inherent presence of speculation, does not give an expert liberty to forecast, project, or calculate values and amounts beyond the scope of what can reasonably be relied upon based upon the data (sufficient relevant data) used to arrive at what one believes is the right number.  This requires an expert to break down assumptions based upon the most fundamental evidence of what is known or proven.  What can be considered as known or proven depends first on the evidence put on the record, support provided, or information available.

A quick example of this would be a lost earning capacity calculation which tries to quantify the future monetary loss deriving from an injured party’s reduction in work life expectancy, annual earnings, or a combination of both.  The most fundamental components used to calculate pre-injury and post injury earnings capacity are the Annual Earnings Base and Work Life Expectancy.  An annual earnings base can be built from what is known or proven based upon the supporting documentation provided which may come in the form of either an hourly rate of pay (i.e., dollars earned per hour) or an annual earnings basis (i.e., dollars earned per year).  If an hourly rate of pay can be used based upon a vocational analysis or demonstrated earnings derived from a paystub that notes an hourly rate, this hourly rate can be converted in an annual earnings base by multiplying by 2,080 hours per year (40 hours per week x 52 weeks per year = 2,080 hours per year).

Work Life Expectancy too can be built with and without a work disability based upon the known or proven age, race, sex, and level of education of the Plaintiff.  The above assumptions require very little if any speculation and most importantly, are based upon facts that are either known or proven.  Despite this relatively simple exercise of building non-speculative assumptions, I see experts on a weekly basis that ignore this approach in exchange for a speculative forecast that minimizes damages when working for a Defense attorney and maximizes damages when Plaintiff counsel call.  Do not succumb to this meritless practice.

  1. Thou Shall Avoid Bias at all Costs

Financial experts should avoid bias at all costs.  Bias exists by virtue; a very human tendency to learn through experience and make decisions accordingly.  The pervasive nature of bias can, at times overwhelm our thought process despite every attempt to shed this flawed thinking from our subconscious.  Forensic accountants and valuation professionals have a responsibility to the court to render an unbiased (neutral) opinion of damages or business value while having what clearly can be defined as a direct financial interest with a plaintiff, defendant, petitioner, or respondent.  This inherently conflicted role places an extreme amount of pressure on experts to use bias to inflate or deflate damages or conclude an artificially high or low value of a business in a divorce.  If you are known for inflating or deflating damages or convincing family law courts of your unsupported opinions of value, you are likely breaking more than a few rules and regulations along the way and, at a minimum, are violating many ethical provisions that are no laughing matter when you are stripped of you credentials or barred from doing valuations by the IRS for the next decade.  Ironically, ethical behavior, like bias, is best taught through experience and observation.

  1. Thou Shall be Unimpeachably Neutral

Financial experts should strive to be unimpeachably neutral in all aspects of their work.¬† Neutrality, in my opinion, is the very essence of what an expert witness should strive for, as the primary obligation of an expert witness is to use our scientific, technical, or other specialized knowledge to help the trier of fact understand the evidence or to determine a fact in issue.¬† To be fair, the concept of a neutral expert can easily be viewed as antithetical to the adversarial nature of the court system.¬† This is evidenced by the term ‚Äúneutral expert‚ÄĚ being used in instances that an expert is appointed by the court even though all experts, even those hired by one side, are all technically supposed to be neutral.¬† I feel that we all have a responsibility to help define or in some cases redefine our respective disciplines by striving to portray the very best of what our profession has to offer to society.¬† While it may be too late for many experts to save face, the next generation of expert witnesses must be taught to be a neutral helper to the court or risk a profession being judicially eliminated through systemic modification of the court system as we know it today.¬† Financial experts can more effectively fulfill their obligations to the court by implementing these commandments while in pursuit of the right number and ‚ÄúUnimpeachable Neutrality‚ÄĚ.

C. Zachary Meyers is a licensed Certified Public Accountant and Certified Valuation Analyst. Mr. Meyers has provided litigation support services in over 1,000 cases since 2011 as a consulting or testifying expert. His experience includes: authoring expert reports, expert rebuttal reports, and critiques related to economic damages, punitive damages, business valuation, and matrimonial litigation. Mr. Meyers has served as joint/court appointed business valuation expert in matrimonial litigation and facilitated equitable settlements for both business owner and non-business owner parties to matrimonial litigation. Mr. Meyers was elected to the National Association of Certified Valuators and Analysts (NACVA) Standards Board in 2016 and appointed Vice-Chair in 2017.
Mr. Meyers can be contacted at (304) 690-2619 or by e-mail to

The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

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