Forensic Accounting and Fraud Examination, 2nd Edition

3Legal, Regulatory, and Professional Environment

According to US Legal.com, a Daubert challenge is a hearing conducted before a judge where the validity and admissibility of expert testimony are challenged by opposing counsel. The expert is required to demonstrate that his/her methodology and reasoning are scientifically valid and can be applied to the facts of the case. The term comes from the 1993 U.S. Supreme Court case, Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), in which the Court articulated a new set of criteria for the admissibility of scientific expert testimony. In its 1999 Kumho Tire v. Carmichael opinion, the Court extended Daubert’s general holding to include nonscientific expert testimony as well.¹ An expert who expects to testify in civil or criminal court about his or her work needs to be aware of and prepared for a Daubert challenge.

In a 2017 Fraud Magazine article, John D. Gill, ACFE Vice President of Education, penned an article titled: “The Fraud Triangle on Trial.” In his article, Gill examined several U.S. court opinions that refer to the fraud triangle and was surprised to find cases where judges denied the admission of expert testimony about the triangle because they deemed it to be “unreliable” scientific theory.² The following are excerpts from Gill’s summaries of three cases:

• Haupt v. Heaps, 131 P.3d 252 (2005). The appellate court “failed to locate even a single case in which the ‘fraud triangles’ [sic] theory has been adopted ...