Introduction
Forensic accountants are professionals who provide litigation support and act as expert witnesses. They are financial investigators and detectives who audit and investigate financial reporting documents to determine their accuracy. Their work is often related to legal actions that are either anticipated or ongoing.
When it comes to criminal and civil cases, including pretrial depositions, forensic accountants often serve as expert witnesses in court. Their role is to analyze financial crimes using their accounting, auditing, and investigative skills. Additionally, a basic comprehension of legal principles is imperative for them. Given this knowledge, evaluate the following: a) The significance of legal aspects in relation to a financial crime and how their presence or absence impacts the crime.
Two elements are typically necessary for someone to be convicted of a criminal offense: actus reus, which refers to the guilty act in Latin, and mens rea, which refers to the guilty mind. These terms have varying definitions depending on the specific crime and extend beyond moral culpability. It is worth noting that being responsible for a crime involves not only engaging in certain conduct but also usually possessing a particular mental state towards such behavior.
Except for crimes of strict liability, all offenses require both the actus reus and mens rea to be proven beyond reasonable doubt. Whether defined in statute or under common law, the definition of a specific crime includes these elements. English law presumes innocence until guilt is proven, as demonstrated in the case Woolmington v DPP (1935). The prosecution must satisfy the magistrates or jury by providing evidence for both elements; otherwise, acquittal will occur.
Actus reus
An actus reus refers to more than just an act. It encompasses all the elements of the offense, excluding the defendant’s state of mind. This may involve the circumstances and/or the consequences of the actions perpetrated, depending on the offense. Take rape, for instance. It necessitates non-consensual sexual intercourse initiated by a man. Lack of consent is an independent surrounding circumstance separate from the accused’s action. The categories of actus reus include voluntary acts or conduct.
If the accused is to be found guilty of a crime, their voluntary behavior in committing the actus reus is essential. Generally, behavior is regarded as involuntary only when the accused had no control over their own body (in cases of insanity or automatism) or when they faced intense coercion from another person, such as a threat of death if they did not commit a specific offense (in cases of duress).
Omission – Must Be Voluntary
Despite the rarity of imposing criminal liability for omissions in common law, certain situations can legally classify what appears as an omission to the average person as an act and thereby lead to liability. Additionally, there are instances where the defendant is obligated by law to take action, making real omissions a basis for liability. Thus, it is crucial to ascertain whether the circumstances constitute an act or an omission in accordance with the law. The term mens rea, meaning ‘guilty mind’ in Latin, pertains to the mental state of the offender.
The mens rea for criminal offenses can differ, but two main mental states can meet the required mens rea: intention and recklessness. Intention pertains to the defendant’s individual goals or desires during the offense, rather than what a reasonable person would intend under similar circumstances. This includes foreseeing the particular consequences of one’s actions.
The legal meaning of intention can be divided into two forms: direct intention and indirect intention. In contrast, recklessness refers to a situation where an accused individual ignores the clear outcomes of their actions and knowingly takes the risk of causing harm. In simpler terms, recklessness can be defined as taking an unjustifiable chance. However, its legal understanding has recently experienced significant changes. Currently, it is apparent that recklessness is a subjective form of mens rea, emphasizing the mental state of the defendant.
In 1981, the case of MPC v Caldwell established an objective form of recklessness, which was later abolished in 2003 by the case of R v G and another. When discussing mens rea, there is a distinction between subjective and objective tests. A subjective test examines the actual thoughts of the defendant (or what the magistrates or jury perceive those thoughts to be), while an objective test evaluates what a reasonable person would have thought in the defendant’s circumstances.
The courts today are favoring subjective tests for mens rea, which include negligence, rashness, malignantly/maliciously, and knowledge. The presence of these types of mens rea can establish criminal liability, while their absence can negate it. Additionally, this text explores the concept of motive in financial crimes and its legal status. Motive refers to the cause and reason behind an offender’s actions and is not typically considered an element of a crime. However, the legal system may allow the proof of motive to make the accused’s reasons for committing a crime more plausible, especially when those motives are unclear or difficult to identify.
The purpose of financial crimes is to acquire and hide money. Forensic accountants utilize auditing and investigation techniques to identify the types of these offenses, including misappropriation of assets, fraudulent financial statements, corruption, and deceptive representation. They apply their expertise in finance, law, and research to expose crimes and potentially present their findings in court proceedings.
While not essential for a crime according to criminal law, motive can be employed to clarify the actions of the accused individual, particularly in cases involving murder. Motive is frequently utilized alongside criminal law to bolster the prosecution’s argument that the defendant carried out the offense.
The prosecution may argue that greed was the motive for the killing if a person accused of murder is the beneficiary of a life insurance policy on the deceased. Establishing the motive early in the investigation is crucial as it guides the direction of inquiry. Motives for financial crimes usually consist of various factors such as greed, drugs, revenge, hatred, envy/jealousy, love, compassion, thrill/fun, bragging/showing off skills, and more.
Determining the motive in a criminal investigation involves conducting a detailed interview with the victim. The motive is the probable reason behind a person committing a crime, such as jealousy, greed, revenge, or part of a theft. Although evidence of a motive can be presented during a trial, it is not essential to proving the crime. Forensic accountants, for instance, examine cases of accounting fraud within companies by considering the employee’s opportunity, motives, and pressures.
Forensic accountants utilize auditing, accounting, and investigative skills to interpret and analyze financial and commercial information for legal proceedings. Their work receives a higher level of assurance and undergoes legal scrutiny. They dedicate more time to understanding transaction substance and purpose, as well as underlying motives. Additionally, their primary duty is to the Court rather than their client.
Conclusion
In addition to their usual role in the corporate industry and investigating the financial status of individuals for legal reasons, forensic accountants also delve into criminal organizations to retrieve unlawfully acquired funds and identify instances of money laundering. The expertise of forensic accountants is essential in cases involving government seizure of assets related to organized crime or tax disputes involving individuals or businesses.
REFERENCE
The ninth edition of Criminal Law by Catherine Elliot And Frances Quinn.
2. This section provides an introduction to the principles and liability in criminal law, specifically focusing on the elements of criminal liability.
3. Lee Chong Fook, Habibah Kiprawi, and Che Audah Hassan are authors who discuss the process of criminal justice.
4. Geoff Douglas’ 3rd Edition of Criminal Law: Questions & Answers.
5. Andrew Beattie (August 22, 2009) wrote an article about the common clues of financial statement manipulation.
6. The Financial Crime Enforcement Network is a part of the United States Department of Treasury.
7. Binder, Guyora. 2002. “The Rhetoric of Motive and Intent.” Buffalo Criminal Law Review 6 (fall).
8. Candeub, Adam. 1994. “Motive Crimes and Other Minds.” University of Pennsylvania Law Review 142 (June).
