In financial disputes that reach the courts, the amount of financial damages and other relevant indicators are often substantiated through expert calculations. However, even when examining a similar set of documents, specialists sometimes arrive at different results. The reason is not always an arithmetic error: conclusions are influenced by the scope of the source data, the valuation date, the method applied, and the assumptions made.
We discussed all these nuances with a unique specialist – Ukrainian forensic economic expert Oleksandr Kostyen, who lives in Pittsburgh, Pennsylvania.
Born in Ukraine, he moved to the United States in 2024. He qualified as a forensic expert in Ukraine in 2018, which authorizes him to conduct specialized expert examinations of accounting and tax documents, as well as documents relating to the economic activities of enterprises and financial and credit transactions.
Since beginning his practice, Oleksandr Kostyen has prepared more than 600 expert reports for Ukrainian courts concerning additional tax assessments and other disputed amounts totaling more than UAH 1 billion (approximately USD 23 million).
In addition to his primary professional activities, the expert actively participates in the professional academic community—he regularly publishes materials on forensic economic examination methodology and matters of expert practice and takes part in professional events as a speaker.
Incidentally, Oleksandr Kostyen is the only forensic economic expert in Ukraine to have received the prestigious national award—the Order of Ivan Mazepa.
– Mr. Kostyen, is it possible to determine from a documentary expert report where it was prepared?
– Often it is, primarily from its structure and mandatory details. In Ukraine, an expert report is prepared in accordance with the requirements of legislation and regulations governing forensic examinations and contains introductory and analytical sections, as well as conclusions. It specifies the grounds for conducting the examination, information about the expert, the questions posed, the materials submitted, the course of the examination, and the results obtained.
In the United States, there is no single format for all jurisdictions and types of proceedings. For example, in federal civil proceedings, the written report of an expert specifically retained or employed to provide testimony must contain a complete statement of all opinions and the basis for them, the facts and data considered, the materials used, the expert’s qualifications, the expert’s publications from the previous ten years, information about testimony given as an expert during the previous four years, and details of the compensation received. However, I should note that this is not a universal rule for every American case.
– Is there a direct equivalent of the Ukrainian forensic economic expert in the United States?
– There is no exact institutional equivalent. In Ukraine, economic examination is a separate type of forensic examination with established expert specializations and a certification system. In the United States, similar tasks may be performed by forensic accountants, Certified Public Accountants (CPAs), business valuation specialists, economists, and damages experts. The specific professional profile depends on the subject matter of the dispute and the questions the specialist is expected to answer.
– And what criteria define an expert in this field?
– In Ukraine, certified forensic experts are entered in the State Register of Certified Forensic Experts. In cases provided for by law, other specialists with expertise in the relevant field may also be engaged to conduct an examination, but this depends on the type of examination and procedural restrictions. In the United States, there is no single state registry of expert witnesses. Their qualifications may be based on knowledge, skills, experience, training, or education, but qualifications alone are not sufficient: the party offering the expert opinion must demonstrate to the court that the specialized knowledge will genuinely help understand the evidence or establish a material fact and that the opinion is based on sufficient data. In addition, it is important to demonstrate that the examination method is reliable and has been properly applied to the circumstances of the case. Generally speaking, in U.S. federal courts, a license or certificate is relevant, but it does not eliminate judicial review of the admissibility of a particular opinion.
– Who selects the expert?
– In Ukraine, an examination may be conducted on the basis of a decision by a court or a pretrial investigation authority, or under an agreement with an expert or expert institution when the examination is commissioned by another person. The specific procedure depends on the type of legal proceedings. In the U.S. adversarial system, the parties retain their own experts. The court may also appoint an expert.
– Why do experts arrive at different figures when examining documents?
– Even when the documents are identical, the result is influenced by which data the specialist considers relevant, which period and valuation date are selected, how accounting figures are interpreted, which method is applied, and which economic assumptions are used. In calculations of lost profits or business value, the forecast period, growth rates, future expenses, risks, and discount rate are particularly important.
– So it is not enough simply to show that a calculation is arithmetically correct or incorrect?
– That is absolutely correct. It is necessary to disclose the source data, explain the choice of method and assumptions, test the sensitivity of the result to changes in those assumptions, and distinguish specialized conclusions from the legal premises determined by the court.
– Which system is stricter in its approach to methodology—the American or the Ukrainian system?
– It is not entirely appropriate to compare them on a single “stricter – more lenient” scale. In Ukraine, the status of a forensic expert, expert specialization, grounds for conducting an examination, structure of the report, and regulatory requirements governing the conduct and documentation of an expert examination are more formalized. In a United States federal court, the emphasis is placed on the admissibility of a particular expert opinion: the court assesses the expert’s qualifications, the usefulness of the specialized knowledge, the sufficiency of the data, the reliability of the principles and methods, and the reliability of their application.
– But each state may have its own rules.
– That is precisely why we are speaking generally about the federal rules here (smiles). The United States does not have a single procedural system for all cases. Federal rules apply in federal courts, while state courts follow their own rules and judicial precedents. Therefore, the requirements in a Pennsylvania state court, for example, differ from those in a federal court in Pennsylvania.
– Is there anything the Ukrainian and American systems have in common?
– In both systems, the expert’s task is to help the court understand matters requiring specialized knowledge, make the source data and reasoning transparent, and provide conclusions within the scope of the expert’s competence. At the same time, in Ukraine, an expert does not address matters beyond the scope of the expert’s specialization, including questions of law. In U.S. federal proceedings, expert opinion is admissible, but it does not replace the court in interpreting the law. Therefore, I repeat, despite differences in procedures and professional infrastructure, the general practical objective is similar: to translate complex financial documents and calculations into language the court can understand, clearly demonstrate the methodology, and enable verification of the result’s soundness.
