Types of Forensic Economic Examination: Specialties 11.1–11.3

In forensic economic examination there is no such thing as a universal “economist.” There are three distinct expert specialties — 11.1, 11.2 and 11.3 — and which of them your question is addressed to determines not only who will study the documents, but whether you receive an answer on the merits at all. In my practice, the most common reason for the formal refusal “it did not prove possible to resolve the question” is a question put to the wrong specialty, or a document set gathered for a different one.

Where the split into specialties comes from

The list of economic specialties was not invented by experts to suit themselves. The legal foundation of forensic expert activity in Ukraine is the Law of Ukraine “On Forensic Expert Activity,” while the procedure for assigning and conducting examinations is set out in the regulations of the Ministry of Justice — above all the Instruction on the Assignment and Conduct of Forensic Examinations and Expert Studies (Ministry of Justice Order No. 53/5), together with the scientific and methodological recommendations and the approved list of types of forensic examinations and expert specialties, against which forensic experts are certified and obtain their qualification.

An economic examination may be ordered in criminal, commercial, civil and administrative proceedings (governed by the KPK, HPK, TsPK and KASU — the respective procedural codes of Ukraine). It is usually initiated by a court or an investigator, and it is frequently prompted by the materials of audits carried out by the State Tax Service (DPS), investigations by the Bureau of Economic Security (BEB), or reviews by the State Financial Monitoring Service (Derzhfinmonitoring). Throughout, the expert remains independent and examines only the documents actually provided.

Economic examination forms a separate class (traditionally numbered 11), and within it three basic specialties are distinguished:

• 11.1 — examination of accounting, tax-accounting and financial-reporting documents;
• 11.2 — examination of documents on the economic activity of enterprises and organizations;
• 11.3 — examination of documents of financial and credit operations.

Each specialty is confirmed by a separate forensic expert certificate. One specialist may hold several specialties at once — and that is precisely what makes it possible to handle complex cases comprehensively. But the boundaries of each specialty are drawn clearly, and stepping beyond them makes the conclusion vulnerable to challenge.

Specialty 11.1 — accounting, taxes, reporting

This is the “classic” accounting examination. It applies where the question comes down to bookkeeping, assessments and reporting under the rules of accounting and tax law: whether the accounting data match the primary documents, whether taxes and wages have been calculated correctly, whether a specific transaction is supported by documentation.

Typical questions for 11.1:

• Are the receipt and write-off of inventory items over the period under review supported by documents?
• What is the documented amount of understated (or overstated) tax liabilities?
• Do the financial-reporting figures agree with the accounting records and the primary documents?
• What is the amount of wages accrued but not paid?

What the expert will need: primary documents (invoices, acts, cash and bank records), accounting registers, trial balances, the general ledger, tax returns and calculations, and the order on accounting policy.

Specialty 11.2 — the economic activity of the enterprise

This specialty looks wider than a single ledger entry — at the economic indicators of a business’s activity: the formation of cost of goods and financial results, the reality and completeness of business operations, the justification of expenses, and the calculation of losses caused by non-performance of obligations.

Typical questions for 11.2:

• What is the amount of losses (including lost profit) caused by breach of a contract or by specific actions?
• Are the reality and completeness of business operations with a counterparty confirmed by documents?
• How were revenue, expenses and the financial result formed over the period under review?
• Does the actual use of funds or property correspond to its designated purpose?

What the expert will need: contracts with all annexes, costings and estimates, acts of completed work, data on the movement of goods and funds, statements of financial results, and counterparties’ documents.

Specialty 11.3 — financial and credit operations

This specialty is about loans, collateral, settlements on borrowings and the movement of funds in the financial-credit sphere. It is ordered in disputes with banks and financial institutions, in cases of fraud involving financial resources, and where the justification for granting and servicing a loan must be assessed.

Typical questions for 11.3:

• Does the actual accrual of interest, fees and penalties match the terms of the loan agreement?
• What is the outstanding balance of the loan as of a given date, based on the documents provided?
• Was the security (collateral) sufficient in relation to the amount of the loan issued?
• Is the targeted use of the loan funds confirmed by documents?

What the expert will need: the loan agreement and repayment schedule, pledge and surety agreements, account statements, memorial orders, the bank’s calculations, and documents on the valuation of the security.

Quick reference: which specialty to choose

Nature of the question	Specialty	Key example question
Accounting, taxes, reporting	11.1	Amount of understated taxes; whether records match primary documents
Economics of activity, losses	11.2	Amount of losses; reality and completeness of operations
Loans, collateral, settlements	11.3	Adequacy of security; outstanding loan balance

A simple rule from practice: a question about accounting and taxes is 11.1; about losses, expenses and the reality of operations it is 11.2; about a loan, interest and collateral it is 11.3.

When one specialty doesn’t cover the case

Real cases rarely fit neatly into a single specialty. A comprehensive examination is ordered when answering the question requires the knowledge of several specialties at once — or even of different types of examination.

The most typical combinations from my practice:

• 11.1 + 11.2 — when it is necessary both to verify the correctness of the accounting and to assess the economic result of activity or the amount of losses.
• 11.2 + 11.3 — when a business operation was financed with credit funds and the whole chain has to be traced. For example, a company claims losses for a failed contract while the supplier had bought part of the goods on credit — here it is natural to combine analysis of the economics of activity with financial-credit analysis.
• Economic + goods (valuation) examination — when the size of the loss depends on the value of property or goods: the value is determined by a goods expert, and the economic consequences are calculated by the economist.
• Economic + construction-technical examination — in construction disputes: the volume and cost of work actually performed is established by a construction expert, while the economist calculates the financial consequences.

It is important to understand that a comprehensive examination is not “more questions for one expert,” but the involvement of several specialists holding the appropriate certificates, each answering within the limits of their own competence.

Where the economist’s competence ends

A forensic economic expert studies documents — and only documents. Many questions that the parties mistakenly try to put fall outside economic competence:

• Legal qualification — the existence of fault, the elements of an offence, the validity of a contract. That is for the court or the pre-trial investigation body, not the expert.
• Market value of property — the subject of a goods (valuation) examination.
• Volume and quality of construction work — a construction-technical examination.
• Authenticity of a signature or signs of a forged document — handwriting examination and technical-forensic examination of documents.

If the materials contain no documents but only testimony or assumptions, the economist will not “fill in” the missing primary records. The expert works with what is provided and will honestly record the impossibility of answering for lack of data — that is not a flaw of the examination but its very principle.

Specialty first, then documents

This is something often underestimated at the ordering stage. First determine the specialty, and only then assemble the documents for it — not the other way round. A 11.3 question cannot be resolved on tax returns alone, and a 11.1 question cannot be resolved on a loan agreement alone.

A practical tip: before writing questions into a court ruling or an investigator’s order, agree two things with the expert — which specialty the question belongs to and what minimum set of documents it requires. This saves months; otherwise the examination “stalls” on a motion to provide additional materials.

The costliest mistake — a question sent to the wrong address

The most common and most frustrating situation: the question is well framed on the merits but addressed to a specialty that does not deal with it. For example, an accounting examination (11.1) is asked to assess the adequacy of loan security — the field of 11.3. Or an economist is expected to give a conclusion on the market value of an asset, which is the subject of a goods examination.

The result is always the same — wording along the lines of “it did not prove possible to resolve the question” or “the question is beyond the expert’s competence.” Formally there is a conclusion, but it is of no use to the case; time and money are spent.

How to avoid this — four steps:

1. Identify the nature of the question: accounting / economics of activity / credit — and match it against specialties 11.1, 11.2, 11.3.
2. Check whether a different or comprehensive examination is needed (goods, construction-technical).
3. Agree the list of documents specifically for the chosen specialty.
4. Frame the question precisely and measurably — with a period, a counterparty, a contract and a date.

In short

The three economic specialties are not a bureaucratic formality but a filter that determines whether you receive a workable conclusion. 11.1 is accounting and taxes, 11.2 is the economics of activity and losses, 11.3 is loans and collateral; complex cases often require a comprehensive study or the involvement of a goods or construction examination.

If you are unsure which specialty your question belongs to and what documents will be needed, it is best to agree this before the examination is ordered. A short consultation at this stage preserves your time, your money, and the very possibility of getting an answer on the merits.