Expert Witness Journal Issue 66 April 2026 - Flipbook - Page 23
is not to convict or defend auditors, nor to opine on
the judgement they personally would have reached,
but to illuminate:
ongoing litigation as revenue. The auditor accepted
management’s view that a higher settlement 昀椀gure
would be achieved.
•
•
•
•
Although this was a judgmental issue involving
signi昀椀cant uncertainty, the regulator concluded
that the auditors accepted management’s overly
optimistic view with insu昀케cient scepticism or
corroboration after a forensic review of the audit
昀椀les and contemporaneous evidence.
In an era of increasing regulatory scrutiny
and high pro昀椀le litigation, objective expert
collaboration remains essential. Combining forensic
reconstruction with audit technical provides clarity,
context, and impartial judgement that can be crucial
to reaching the right outcome.
Recreating the audit room: evaluating an
auditor’s response to fraud risk
A forensic review reconstructs what information was
truly available. This matters because auditors often
face concealment strategies, delayed information, or
seemingly plausible explanations.
If you’re facing an auditor negligence dispute or
need expert support in evaluating judgement,
evidence or process, our specialists can help. Get
in touch to discuss how forensic reconstruction and
audit expertise can bring clarity to your case.
Such a reconstruction helps identify whether red
昀氀ags were:
•
•
•
•
what the auditor reasonably should have done
what information was realistically available
whether deviations from standards occurred
whether those deviations actually caused the
claimed losses.
detectable with reasonable e昀昀ort
masked by management
unconnected to audit scope
not logically linked to the auditor’s assigned
purpose.
www.crowe.com/uk
This helps the Courts understand that even severe
failures in an organisation do not automatically
equate to negligent audit decision making.
Experts need to be mindful of avoiding hindsight
in audit negligence cases. After failure or fraud
is uncovered, linkages seem obvious and missing
procedures seem decisive. Forensic reconstruction
provides an anchor against which the information
that was truly within the auditor’s potential grasp,
at the time, can be properly considered.
Crowe Expert
Witness Services
Case study: client concealment contributed to an
auditor’s successful defence
The High Court dismissed a negligence claim
brought against an auditor despite 昀椀ndings that
aspects of the audit work were “seriously de昀椀cient.”
The company had su昀昀ered a £4.5 million accounting
understatement caused by “serious irregularities”
in its internal accounting systems, which were only
discovered years later.
Forensic and Tax Resolutions Specialists
Find out more about our Expert Witness Services:
www.crowe.co.uk
Start the conversation
Martin Chapman
National Head of Forensic Services
martin.chapman@crowe.co.uk
+44 (0)121 812 0001
However, the judge ruled that although the audit
work fell below the required standard in places,
it could not be established that a reasonably
competent auditor would have identi昀椀ed the issues
due to management’s behaviour and concealment of
the issues.
@CroweUK
John Cassidy
Partner, Tax Resolutions
john.cassidy@crowe.co.uk
+44 (0)20 7842 7356
@Crowe_UK
Concluding thoughts
Assessing auditor negligence is a balance between
technical rigour, investigative discipline, and
resistance to hindsight bias. An expert’s responsibility
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APRIL 2026
