Quantifying Damages

In tort action, there are 4 broad categories of damages – compensatory, nominal, aggravated and exemplary or punitive (Australian Law Reform Commission, 2017). In my opinion, aggravated damages maybe one of the most complex category to work on as it may be too remote and difficult to put a value for the claim for damaged feelings or emotional distressed. This may also be the reason why the law has always been reluctant to compensate for mental distress (Havilah, 2014). 

Quantification of losses should be based on factual evidences, documents and witness statements, as well as expert reports. Another complexity in assessing damages was displayed in the case of Ramsay v BigTinCan Pty Ltd [2014], where the courts struggled to quantify the damages as the process is difficult, impressionistic and highly subjective. All 4 judges in the case had made used of different methods and percentage of estimates to determine the sum to be awarded (Angyal, 2014). 

Specialised knowledge is crucial to understand the most effective method to use in evaluating the claims. Since in this process, forensic accountants (FA) have to exercise a lot of their own judgements and will be appear in the court to elaborate on the process, having specialised knowledge will ensure that the FA’s credibility and professionalism are not undermined during the legal process. 

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References

Angyal, R. (7 October, 2014). Quantifying damages for economic loss: Is this the hardest thing commercial lawyers do? Retrieved from Legalwise Seminars: http://www.legalwiseseminars.com.au/articles/posts/2014/quantifying-damages-for-economic-loss-is-this-the-hardest-thing-commercial-lawyers-do/

Australian Law Reform Commission. (2017). 12. Remedies and Costs. Retrieved from Australian Law Reform Commission: https://www.alrc.gov.au/publications/12-remedies-and-costs/damages

Brennan, N., & Hennessy, J. (10, 2001). Forensic accounting and the calculation of commercial. Retrieved from Research Repository UCD: http://researchrepository.ucd.ie/bitstream/handle/10197/5384/08_18_Brennan_Hennessy_Forensic_Accounting_and_the_Calculation_of_Commercial_Damages_Bar_Review.pdf?sequence=1

Havilah, B. (23 October, 2014). Compensation for reputation loss and hurt feelings – Maybe Not? Retrieved from Havila Legal: http://www.havilahlegal.com.au/compensation-for-reputation-loss-and-hurt-feelings.html

Strict or Vicarious Liability to Minimize Fraud, Bribery and Corruption

I agree that strict or vicarious liability will minimise fraud, bribery and corruption. This reminded me of my previous café job. Our staff benefits includes unlimited ice-cream during work, but some staffs went overboard by not charging their friends when they patronised the café. Thus, the boss threatened to deduct our salaries should there be any significant variance in the sales and ice-cream quantity. This almost eradicated the issue when the responsibility was shifted to us to ensure others avoid committing such acts.

The major business crime categories include white-collar crime, organised crime, computer crime and regulatory, corporate and compliance offences (Latimer, 2012). An example is the Dark Web where cybercriminals anonymously seeks into the market to purvey illicit goods such as drugs, weapons, counterfeit, trade secrets and copyrighted, falsified or stolen documents (Pierce, Ballard, & Nguyen, 2016). Anonymity is furthered by the use of Bitcoin, a digital currency that’s untraceable to any single person. Such crimes will be minimised as Internet Service Providers (ISP) are vicariously liable if they have the right and ability to control the activity and profits from the infringement (Teran, n.d.). This was illustrated in the US case where ISP Cox Communications was ordered to pay $25 million to BMG Rights Management LLC for the copyright infringement of its subscribers, which engaged in illegal peer-to-peer sharing of music files using Cox’s internet services (Hoover, 2015). 

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Article:

• Silk Road sentence sets dangerous precedent
• 26 Crazy Things You Can Buy on the Dark Web

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References

Hoover, J. (17 December, 2015). Cox Must Pay BMG $25M For User Piracy, Jury Finds. Retrieved from Law 360: https://www.law360.com/articles/739353/cox-must-pay-bmg-25m-for-user-piracy-jury-finds

Latimer, P. (2012). Crime In the Business World. In P. Latimer, Australian Business Law 2012 (p. 96). Australia: CCH Australia Limited.

Pierce, J. E., Ballard, M., & Nguyen, T. X. (2016). Global brand and content protection: developments and emerging technologies. Retrieved from World Trademark Review: http://www.worldtrademarkreview.com/Intelligence/Anti-counterfeiting/2016/Industry-insight/Global-brand-and-content-protection-developments-and-emerging-technologies

Teran, G. (n.d.). ISP Liability for Copyright Infringement. Retrieved from Harvard: https://cyber.harvard.edu/property99/liability/main.html

Forensic Accountants and The Law

I agree to a certain extent that Forensic Accountants (FA) have to be familiar with the law. FA works closely with the government, industry, and professional regulators, with abundance of rules, regulations and guidelines enforced upon their work (Ozkul & Pamukcu, 2012). The Australian legal profession is regulated on a state and territorial basis (Commission, 2017) and there are many area of specialisation which FA can embark on. To be acquainted in every aspect is too broad for FA thus, I feel that FA should familiarise themselves with the fundamental and only focus in-depth if it’s within their specialty. 

However, being knowledgeable of the rules is one thing but adhering is another. An article I read unveiled the ethics of 9 expert witnesses. When undercover reporters challenged their integrity, only 1 refused the engagement after reporters admitted guilt (Marsden, 2014). Not only did the remaining experts not account their confession in their report, they concluded there were insufficient evidences to determine who the wrongdoer was. According to NSW Ombudsman (2012), public interest refers to considerations affecting the good order of the community, government affairs and citizen’s well-being. Experts who aren’t impartial and independent or are ignorant of the rules will cause detriment to the public interest as they are wasting taxpayers’ money by giving weak evidences and regulators would need to reopen those cases where they provided their reports (Daily Mail, 2007).

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Useful Links

Article:

• Characteristics and Skills of the Forensic Accountant
• How Do Public Interest Considerations Impact On The Role Of Public Sector Lawyers?
• How police put their faith in the 'expert' witness who was a fraud
• When expert witnesses get it wrong

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References

Commission, A. L. (2017). 4. Ensuring Professional Integrity: Ethical Obligations and Discovery. Retrieved from Australian Law Reform Commission: https://www.alrc.gov.au/publications/4.%20Ensuring%20Professional%20Integrity%3A%20Ethical%20Obligations%20and%20Discovery/sources-legal-eth

Daily Mail. (22 February, 2007). Bogus 'expert witness' jailed for five year. Retrieved from Daily Mail: http://www.dailymail.co.uk/news/article-437841/Bogus-expert-witness-jailed-years.html

Marsden, S. (9 June, 2014). Expert court witnesses in bias storm: Specialists filmed saying they will give evidence in defence of paying clients even if they have been told they are guilty. Retrieved from Daily Mail: http://www.dailymail.co.uk/news/article-2652433/Expert-court-witnesses-bias-storm-Specialists-filmed-saying-evidence-defence-paying-clients-told-guilty.html

Ombudsman, N. (March, 2012). Public interest. Retrieved from NSW Ombudsman: https://www.ombo.nsw.gov.au/__data/assets/pdf_file/0014/3713/FS_PSA_16_Public_interest.pdf

Ozkul, F. U., & Pamukcu, A. (2012). Fraud Detection and Forensic Accounting.

COBIT 5 for Information Security and Risk

I agree that COBIT addresses potential security threats. During my internship, I had the chance to audit a security company. Their security was extremely tight, staff and visitors had to go through security scans and exchange their identification card for a day pass into the premise as well as Wi-Fi access which will expire every 2 hours. Although social media sites and access to personal email accounts are restricted in the workplace, it recently implemented Bring Your Own Devices so employees could still work outside official hours. This introduces new vulnerabilities into the security environment as attackers may access the employees’ devices should they connect to unencrypted public Wi-Fi networks or had left their Bluetooth on (ISACA, 2014). It also creates a platform for employees to leak out confidential information via their personal devices.  

Despite having tight security measures, organisations should be weary of malicious end users using security loopholes to commit cybercrimes and threatening their IT security (Wolden, Valverde, & Talla, 2015). COBIT 5 for Information Security addresses such threats by providing organisations with security-specific guidance to reduce their risk profiles. It requires organisation to have full understanding of the potential risks the possible impact and place effective processes around each risk (Field, 2012). Based on each risk scenario, organisations should make effective decisions on whether they will avoid, mitigate, share/transfer or accept the risk. 

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Article:

• Goode, A. (2010). Managing mobile security: How are we doing? Network Security,2010(2), 12-15.

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References

Wolden, Valverde, & Talla. (2015). The effectiveness of COBIT 5 Information Security Framework for reducing Cyber Attacks on Supply Chain Management System. IFAC PapersOnLine, 48(3), 1846-1852.

Field, T. (23 July, 2012). COBIT 5 for Security: What You Need to Know. Retrieved from Bank Info Security: http://www.bankinfosecurity.com/interviews/cobit-5-for-security-what-you-need-to-know-i-1590

ISACA. (2014). Mobile Devices. ISACA Journal, 15-16. Retrieved from https://www.isaca.org/Journal/archives/2014/Volume-5/Documents/Journal-vol-5-2014.pdf