WileyoleYaeger-
I can't tell you for sure that one's auditor may represent them as an expert in litigation. I suppose it would depend on whether the client is public or private, the firm's policies and safeguards to independence, etc. The auditor and client may be able to call it an AUP and specify the court & opposition as privy parties. Who knows.
I can tell you that it is probably the worst idea I have ever even heard of from a litigation strategy standpoint and that the opposing lawyers will BEAT THE TAR out of an auditor who attempts to perform expert witness services on behalf of a client. The auditor would be branded as being “in bed with” or as a “cowboy”, “hired gun”, or worse, “a whore” (I've seen and heard all of these).
Next, as all litigation proceeding are public, the beating would be plainly visible for any future law firm to see. The attorneys, at least the ones you want to work with, do their due diligence on experts. The opposition would most likely try to have the auditor removed as an expert. If successfully removed as an expert, the auditor would basically be an invalid in the litigation arena.
That all being said, it's just as, if not more important, to be impartial in the legal proceedings. It's important to remember that jurys make up their minds in the first ten seconds or something. All the opposition has to do is take a well deserved pot shot at the auditor and his credibility is toast.
A more effective (and better revenue generator for the auditor's firm) would be to act as a consultant for the law firm and develop the work product, then the law firm would hire an independent expert to opine to the figures (just make sure the approriate “threats to independence” are safeguarded). The hourly rate for the expert is better (rates as high as $1,000 an hour to testify aren't unheard of), but the real money is in the back-end work (prob looking at a blended rate of $300-$350/hr, but WAAAAAY more hours than expert). This is actually a fairly common set up, with one firm testifying and another firm “ticking and flicking”.
I have to disagree with M.O.D. in that all consulting services aren't prohibited- only some. Off the top of my head, I think that the prohibited services are, generally speaking, related to: setting up accounting information systems: internal control outsourcing; or accounting advisory prior to audit (there could be others). Aside the the threat to independence, with these services, there is also the threat of self-review. In larger firms, independence threats can be disputed/safeguarded/mitigated/explained away, whereas the threats of self-review and management participation cannot.
Most accounting firms have gone to great lengths to re-establish their consulting services after having spun them off in response to SOX. Many use audit or tax as a way in to provide allowed consulting services because the rates are way better. Heck, most accounting firms would probably rather just be consultants. The money is better (my rate is higher than the tax partners at my firm with 3 yrs exp) and the professional standards are much easier to implement.
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