Assumptions of this kind are commonplace in commercial matters and are often necessary in order to provide the Expert with a basis to form their opinion. In these circumstances, the onus is on the instructing party to provide the basis, supporting evidence or otherwise of the assumption.
However, what is the responsibility of the Expert in regard to instructed assumptions? Blind faith? Critical analysis?
APES 215 Forensic Accounting Services, the professional standard all forensic accounting engagements must comply with, provides the following guidance:
The Report of an Expert Witness
5.6 Subject to any legal requirements or restrictions, a Member providing an Expert Witness Service shall clearly communicate in any Report:
(j) the significant assumptions upon which the opinions or Other Evidence are based and the following matters in respect of each significant assumption:
(i) whether the Member was instructed to make the assumption or whether the Member chose to make the assumption;
(ii) if the Member chose to make the assumption, then the reason why the Member made that choice; and
(k) if the Member considers that an opinion or Other Evidence may be misleading because a significant assumption is likely to mislead, then a statement to that effect and an explanation of why the assumption is likely to mislead.
Therefore, at a minimum, an accounting expert must state the assumptions they were instructed to make. The Expert also has an obligation to communicate any assumption they consider to be misleading and reasons as to why.
It’s unlikely a lawyer would submit an Expert report as evidence supporting their clients' position that has a statement saying an instructed assumption may be misleading. Most issues regarding 'misleading' (or potentially misleading) assumptions are usually thrashed out by the Expert and instructing party prior to the instructed assumption(s) being issued to the Expert.
