What Does a Forensic Accounting Expert Report Contain? A Solicitor's Checklist

A CPR Part 35 forensic accounting expert report must contain the expert's instructions, a statement of facts relied upon, the methodology applied, the expert's reasoned opinion, any caveats or assumptions, the mandatory CPR 35 declaration of truth, and a statement that the expert understands their overriding duty to the court. Reports missing any mandatory element risk being given reduced weight or excluded at trial.

• What are the mandatory elements of a CPR Part 35 expert report?
• How is the body of a forensic accounting expert report structured?
• What we see in practice: the five most common deficiencies in forensic accounting expert reports
• What is the difference between assumptions and opinions in an expert report?
• How should financial schedules and appendices be presented in an expert report?
• What does the expert's declaration at the end of the report mean?

What are the mandatory elements of a CPR Part 35 expert report?

A CPR Part 35 forensic accounting expert report has seven mandatory elements prescribed by Practice Direction 35. Reports that omit any of these elements may be challenged at trial, excluded from evidence, or given reduced weight by the court. Every element serves a specific purpose in ensuring the court can assess the independence and reliability of the expert's opinion.

The first mandatory element is a statement of the expert's instructions, summarising what the instructing party has asked the expert to do and identifying who has given those instructions. This section must be accurate: it defines the scope of the report and any issues falling outside it. Where the instruction has evolved through supplemental letters, each letter should be referenced.

The second mandatory element is a statement of the facts and instructions on which the opinions in the report are based. Where the expert has been given assumed facts rather than agreed facts, the report must clearly identify those assumptions. The expert does not determine disputed facts; that is the court's function. The expert's opinion is conditional on the assumed or proven facts identified in the report.

The third mandatory element is the expert's opinion on each relevant issue, expressed clearly and precisely. Vague or hedged opinions that do not engage with the specific questions asked are inadequate. Where the expert cannot express a single concluded opinion because the outcome depends on how the court resolves a factual dispute, the report should express the opinion in conditional terms: if fact A is found, the loss is X; if fact B is found, the loss is Y.

The fourth mandatory element is a summary of the conclusions. In forensic accounting reports, this typically takes the form of a summary table showing the principal figures. Courts find summary tables helpful because they allow the judge to identify the key numbers without reading the full analysis.

The fifth mandatory element is a statement of the range of opinion, where there is a range of opinion on the issues covered by the report. Where other forensic accountants or valuation professionals might reach a materially different conclusion using equally defensible methodology, the expert should acknowledge this and explain why they have preferred the methodology they have adopted.

The sixth mandatory element is a summary of the expert's qualifications, including the qualifications directly relevant to the expert issues in the report. For a forensic accountant, this would include professional qualification (FCCA, ACA, or equivalent), membership of relevant professional bodies, and experience in the specific type of case.

The seventh mandatory element is the signed declaration required by PD35, confirming that the expert understands their overriding duty to the court, that the report is complete and accurate, and that the expert is aware of the requirements of CPR Part 35 and PD35. The declaration is considered below in detail.

How is the body of a forensic accounting expert report structured?

The body of a forensic accounting expert report follows a logical structure that moves from the factual background through the methodology to the findings and opinion. There is no prescribed format beyond the mandatory elements, but best practice in the profession has converged on a structure that courts find easy to follow and that minimises the risk of challenge on grounds of opacity or incomplete reasoning.

A well-structured forensic accounting report typically contains the following sections in this order. First, an executive summary of no more than two pages, setting out the key questions, the expert's conclusions on each, and the principal figures. Second, a section on the expert's instructions, including the letter or letters of instruction. Third, a section on the documents reviewed, listing every document provided to the expert and noting where any material documents have been requested but not received. Fourth, a factual background section setting out the facts as understood by the expert and identifying any facts that are disputed or that have been assumed rather than agreed.

Fifth, a methodology section explaining how the expert has approached the analysis, why the chosen methodology is appropriate for this type of case, and what alternative methodologies exist and why they have been preferred or rejected. In loss quantification matters such as business interruption or matrimonial finance asset reconstruction, the methodology section is often the most contested part of the report and should be written with particular care. Sixth, the analysis and findings section, presenting the detailed work and supporting calculations. Seventh, the opinion section, setting out the expert's concluded view on each question raised in the letter of instruction. Eighth, the summary of conclusions and any caveats. Ninth, the mandatory declaration.

Financial schedules, working papers, and appendices are presented separately from the narrative body, referenced from the relevant sections of the analysis. This structure keeps the narrative accessible to the judge while making the supporting calculations available for detailed scrutiny by the opposing party's expert or by counsel at trial. See our overview of what a forensic accountant expert witness does in litigation for the broader context of how reports fit into the proceedings.

What we see in practice: the five most common deficiencies in forensic accounting expert reports

From over 150 instructions as a forensic accountant expert witness in England and Wales, I have reviewed a substantial number of expert reports produced by others, including reports I have been asked to critique in joint statements and reports served on me as opposing expert. The deficiencies that most frequently cause reports to be challenged or given reduced weight at trial cluster around five specific failures.

The first and most damaging deficiency is the expert acting as advocate rather than objective analyst. Reports that adopt the instructing party's characterisation of events uncritically, that express conclusions in terms more appropriate to a submission than an analysis, or that fail to acknowledge the limitations of the available evidence are readily identifiable as partisan and are treated accordingly by courts. The principle in Whitehouse v Jordan [1981] is clear: an expert witness, however instructed by one party, must remain independent and objective. The moment an expert becomes an advocate, their evidence loses the weight it would otherwise carry. I have seen reports where every conclusion favoured the instructing party to a degree that could not plausibly reflect objective analysis. Those reports are counterproductive: a moderate conclusion, clearly reasoned, will influence the court more than an extreme position that is plainly driven by the instruction.

The second deficiency is inadequate methodology explanation. A court must be able to understand not only what the expert's conclusion is but why the methodology applied is appropriate and why alternatives have been rejected. Reports that state conclusions without explaining the analytical steps, or that adopt a standard methodology without acknowledging that other methodologies exist, leave the expert exposed on cross-examination. I have seen business valuation reports that apply an earnings multiple without explaining how the multiple was selected, without comparing it to comparable transaction multiples, and without acknowledging the limitations of the chosen approach. Those reports cannot withstand serious scrutiny.

The third deficiency is assumptions presented as facts. Where the expert has been asked to proceed on assumed facts, those assumptions must be clearly identified and distinguished from facts that are established by the documents or agreed between the parties. Reports that blend assumed facts and established facts without clear differentiation create ambiguity about the conditions on which the expert's opinion depends. This matters at trial when the court makes factual findings that differ from the assumptions in the report: the solicitor must be able to identify quickly which conclusions in the report survive and which need to be revisited.

The fourth deficiency is inadequate document review. Forensic accounting expert reports must list every document reviewed and note any gaps. Reports that are based on an incomplete document set but do not acknowledge this create a risk of challenge when the opposing party produces documents that the expert did not consider. A well-drafted report identifies the documents requested, the documents received, and any material gap that may affect the conclusions. This protects the expert and enables the court to understand the basis and limitations of the analysis.

The fifth deficiency, less common but significant when it occurs, is failure to address the range of opinion. Where a forensic accounting question is genuinely contested and professional opinion is divided on methodology, a CPR Part 35 compliant report acknowledges this and explains the expert's preference. Reports that present a single approach as if it were uncontested, when in fact there is a known professional debate about the appropriate methodology, are vulnerable to a joint statement that exposes the expert's failure to engage with alternative approaches. Courts expect experts to be aware of the landscape of opinion in their field, not only their own preferred methodology.

What is the difference between assumptions and opinions in an expert report?

Assumptions and opinions are distinct and must not be conflated in a CPR Part 35 forensic accounting expert report. Confusing the two is one of the most common errors in poorly drafted reports and is regularly exposed in joint meetings and joint statements.

An assumption is a fact the expert has been asked to accept for the purposes of the analysis, or a fact that cannot be established from the documents but must be posited in order to complete the calculation. Assumptions might include the date from which a business interruption loss is measured, the rate at which turnover would have grown absent the relevant event, or the appropriate discount rate to apply to a stream of future losses. Assumptions are not findings and they are not opinions: they are inputs to the analysis, provided either by the instructing solicitor in the letter of instruction or adopted by the expert on a reasoned basis where the documents do not resolve the question.

An opinion is the expert's concluded professional judgement on a question that falls within their expertise and cannot be resolved by reference to documents alone. The expert's opinion on the appropriate earnings multiple for a business of a given size and sector, or the maintainable revenue of a business after controlling for exceptional items, or whether a specific accounting treatment complies with generally accepted accounting principles, are all matters of expert opinion. The court is entitled to reach a different view from the expert on matters of opinion, but it must have reasons for doing so and must explain its departure from expert evidence.

In practice, the clearest discipline is to set out assumptions in a dedicated section of the report, labelled clearly as such, before the analysis begins. Each assumption is listed, its source is identified (instructing solicitor's letter, or expert's own reasoned judgment), and the conclusion that depends on it is cross-referenced. Where the court or the opposing party challenges a specific assumption, the expert can then identify precisely which conclusions are affected and by how much. This structured approach also makes the joint statement process under CPR 35.12 more efficient: the two experts can identify quickly which assumptions they share and which they contest.

How should financial schedules and appendices be presented in an expert report?

Financial schedules and appendices in a forensic accounting expert report serve the calculation work that underpins the narrative opinion. They must be presented in a way that is transparent, cross-referenced to the narrative, and capable of independent verification by the opposing expert.

Each schedule should be clearly titled and dated, with a reference number that corresponds to the reference used in the narrative body of the report. Every input figure in a schedule should be sourced: the schedule should show where each number comes from, whether that is a specific page of a set of accounts, a specific bank statement entry, or an assumption adopted by the expert. Where a schedule involves multi-stage calculations, each stage should be labelled and the mathematical steps shown rather than collapsed into a single derived figure.

Appendices to a forensic accounting report typically include the key source documents extracted for reference (not all disclosure, which would be voluminous, but the specific pages on which key figures are found), working papers supporting complex calculations, and where relevant, the expert's CV and a list of their recent instructions. Courts increasingly expect working papers to be disclosed alongside the report, particularly in complex cases where the opposing expert will wish to trace figures through to their sources.

For reports produced under the matrimonial finance jurisdiction, schedules presenting business valuations should show all three of the earnings, asset, and dividend yield approaches and explain why the preferred approach has been selected, even where two of the three approaches are not the expert's primary recommendation. This allows the court to understand the range of outcomes and the sensitivity of the concluded figure to the choice of methodology.

What does the expert's declaration at the end of the report mean?

The expert's declaration is the mandatory statement required by Practice Direction 35 that appears at the end of every CPR Part 35 compliant expert witness report. It is not a formality. It is the expert's formal acknowledgement of their duties and their confirmation that the report complies with those duties.

The declaration must confirm that the expert understands that their duty is to the court and not to the party who has instructed them or is paying their fees. It must confirm that the expert has complied with that duty. It must confirm that the report sets out the expert's true and complete professional opinion on the matters covered. It must confirm that the expert is aware of the requirements of CPR Part 35 and PD35. It must be signed by the expert personally: it cannot be delegated to a team member or assistant, and a report signed by someone other than the individual who conducted the analysis is non-compliant.

The purpose of the declaration is to impose personal professional responsibility on the expert for the content of the report. Where an expert signs the declaration and the report is later shown to contain material errors or omissions, those errors attract consequences not only for the case but potentially for the expert's professional standing. The Institute of Chartered Accountants in England and Wales and the Association of Chartered Certified Accountants each have professional conduct standards that apply to members acting as expert witnesses, and a report that breaches CPR Part 35 requirements may be referred to the relevant body.

Frequently asked questions

A CPR Part 35 forensic accounting expert report that is properly structured, methodologically sound, and clearly separated between assumptions and opinions will withstand cross-examination and carry real weight with the court. The five deficiencies identified from 150+ instructions are avoidable with proper preparation: choosing an expert who understands their duty to the court rather than to the instructing party, ensuring the letter of instruction addresses all relevant questions, and confirming that document disclosure is complete before the instruction issues. The signed declaration under PD35 is the expert's personal commitment to those standards, and the quality of the report is its practical expression.

To discuss a forensic accounting instruction, including the scope of the expert witness report required for your proceedings, contact Key Ledgers at Key Ledgers enquiry page or call 020 8907 9218.

Author: Bharat Varsani FCCA, CPR Part 35 qualified forensic accountant expert witness, 150+ instructions in England and Wales.

• CPR Part 35 and Practice Direction 35 (Expert Evidence)
• Whitehouse v Jordan [1981] 1 WLR 246
• ICAEW guidance on expert witness obligations