Financial forensic engagements tend to be less well-defined and therefore performed for an hourly rate. Examples of financial forensic engagements include lost profits damages calculations and a search for hidden assets in a divorce. Both tend to be less well-defined and more difficult in terms of predicting the scope of the project.
A good example of a lost profits damages calculation engagement is a breach of contract legal case where the alleged breach caused a business to have been less profitable than had the breach not occurred. As the litigation progresses with a goal of settlement as opposed to going to court, an hourly consulting engagement may be appropriate. If settlement is not possible, more work may be required for a written expert report to present to the court.
The scope of work required for a search for hidden financial information in a divorce is difficult to determine. With this type of engagement, the analyst is typically hired to follow a financial trail possibly using undisclosed credit card or checking accounts to “follow the money.” As the engagement progresses, an expert report may be needed, requiring more time and work.