What is the difference between economic damages and non-economic damages?

Economic damages are objectively measurable financial losses — lost profits, lost wages, medical expenses, and repair costs. Non-economic damages compensate for subjective harm such as pain, suffering, and loss of consortium. A CPA expert witness quantifies economic damages; non-economic damages are typically argued by counsel without expert financial testimony.

How are lost profits calculated in a business interruption claim?

The most common approach is the before-and-after method: comparing the business's pre-event revenue trend to its post-event actual performance, with adjustments for variable costs avoided, mitigation, and intervening causes. The yardstick method may supplement or replace this when comparable industry data is more reliable than internal history.

What financial records are needed for a lost profits analysis?

Typically three to five years of financial statements, tax returns, monthly revenue records, bank statements, payroll records, and any projections or budgets prepared before the harmful event. The more complete the records, the stronger the damages model.

Can Joey Friedman serve as a rebuttal expert against an opposing damages expert?

Yes. Rebuttal engagements are a standard part of the practice. We review the opposing expert's report, identify methodological weaknesses, unsupported assumptions, or calculation errors, and prepare a written rebuttal opinion for use at deposition, in Daubert motions, or at trial.

What does Daubert-ready mean for an economic damages report?

A Daubert-ready report satisfies the four-part admissibility test under Daubert v. Merrell Dow: the methodology is testable, has been subjected to peer review, has known error rates, and is generally accepted in the relevant professional community. All reports prepared by this firm are designed to survive Daubert challenges.

What is the difference between lost profits and lost business value?

Lost profits measures the recurring income stream the business would have earned for a defined period. Lost business value measures the permanent reduction in the going-concern worth of the enterprise attributable to the defendant's conduct. The applicable measure depends on whether the harm was temporary or permanent and on the controlling legal standard.

How long does an economic damages engagement take?

Simple wage-loss or single-year lost profits analyses can often be completed in two to three weeks. Multi-year business interruption or lost business value engagements typically require six to ten weeks, depending on document availability and case complexity.

What industries do you handle for economic damages analysis?

The firm has analyzed economic damages across professional services, healthcare, construction, real estate, retail, technology, financial services, and food and beverage. Case types include commercial litigation, business interruption, intellectual property infringement, employment disputes, partnership dissolution, personal injury, and insurance subrogation matters throughout Florida.

Are expert witness fees contingent on the outcome of the case?

No. Expert witness fees are strictly time-based, never contingent on case outcome. Contingency-fee arrangements for expert witnesses are prohibited by professional standards. A retainer is collected at engagement; billing continues on a time-and-materials basis as work progresses.

How do I retain Joey Friedman as an economic damages expert witness?

Call 954-282-9615 or use our online contact form. We complete a brief conflict check, then issue a formal engagement letter and retainer to get started.

Forensic Accountant vs. Economic-Damages Expert: Which Do You Need for Litigation?

Joey Friedman CPA PA
June 10, 2026
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By Joey N. Friedman, CPA, ABV, M.Acc, MIB — President, Joey Friedman CPA PA.

Quick Answer

A forensic accountant and an economic-damages expert (sometimes called a forensic economist) both help quantify financial loss in litigation, but they approach it from different angles. A forensic accountant works from the books and records — reconstructing income, tracing funds, and calculating lost profits or business value from a company’s own financial data. An economic-damages expert works from economic models — projecting future earnings, work-life expectancy, and the present value of long-term income streams. For most commercial and business disputes (lost profits, business valuation, partner disputes, fraud), a forensic CPA who performs damages analysis is the efficient choice. For personal-injury or wrongful-death cases that turn on a lifetime of projected earnings and benefits, a forensic economist’s modeling may be added. Many engagements need only one expert; some need both. The right answer depends on what has to be proven.

What a Forensic Accountant Does

A forensic accountant applies investigative accounting skills to the financial facts of a case. The work is evidence-focused and detail-driven: the expert analyzes ledgers, bank records, tax returns, and financial statements to determine what actually happened and what it cost.

Typical assignments include:

Lost-profits analysis — measuring the revenue a business would have earned but for the wrongful act, net of the costs it avoided (separating fixed from variable expenses).
Business valuation — determining the value of a closely held company or ownership interest, often under a defined standard of value such as fair market value.
Fraud investigation and asset tracing — identifying hidden assets, fictitious transactions, embezzlement, or discrepancies in the records.
Income reconstruction — rebuilding true income where records are incomplete or a party’s reporting is in question.

Forensic accountants are frequently CPAs, and many hold specialized credentials such as the Accredited in Business Valuation (ABV) designation. Their strength is interpreting a specific business’s own data — including the ability to separate lost revenue from the expenses that would have been required to earn it.

What an Economic-Damages Expert (Forensic Economist) Does

An economic-damages expert, often a forensic economist, applies economic theory and statistical methods to quantify pecuniary loss. The lens is broader: rather than starting from one company’s ledger, the expert builds a model of economic loss using published data and accepted methodologies.

Typical assignments include:

Lost earnings and earning capacity — projecting what an injured or deceased person would have earned over a working lifetime.
Work-life expectancy and career-path modeling — applying statistical tables for how long a person would likely have worked, and at what trajectory.
Present-value calculations — discounting future income streams, benefits, household services, and medical or life-care costs to today’s dollars.
Statistical and forecasting analysis — using economic indicators, wage data, and growth assumptions to support long-horizon projections.

Forensic economists frequently hold advanced economics degrees and belong to professional bodies focused on forensic economics. Their strength is long-horizon forecasting and the economic modeling that personal-injury and wrongful-death matters often require.

Where the Two Roles Overlap

In practice, there is substantial overlap. Both professionals quantify economic damages, and both may calculate lost profits or lost earnings. The line is rarely a wall — it is a matter of emphasis and method:

	Forensic Accountant	Economic-Damages Expert / Forensic Economist
Starting point	The party’s own books and records	Economic data and statistical models
Core strength	Reconstructing financial events; isolating revenue and the expenses to earn it	Forecasting long-horizon earnings and present value
Common matters	Lost profits, business valuation, fraud, partner disputes	Personal-injury/wrongful-death lifetime earnings, benefits, household services
Typical credential	CPA (often ABV/CFF)	Advanced economics degree

Because the disciplines overlap, a forensic CPA who regularly performs damages work can handle the economic-damages analysis in most commercial and financial matters without a separate economist. Conversely, a complex personal-injury claim built on decades of projected earnings may call for a forensic economist’s modeling — and sometimes a forensic accountant and an economist work together, each covering the part of the loss they are best suited to prove.

Which One Does Your Case Need?

A practical way to decide, by what the case turns on:

Lost profits for a business → forensic accountant (the analysis lives in the company’s records).
Business valuation or a buyout/ownership dispute → forensic accountant, ideally one credentialed in valuation (ABV).
Fraud, embezzlement, or hidden assets → forensic accountant (investigative accounting and tracing).
Commercial damages generally → a forensic CPA who performs damages analysis can typically cover it end to end.
Personal-injury or wrongful-death lifetime earnings → economic-damages expert / forensic economist for the long-horizon projection; a forensic accountant may still assist where the injured party owned a business.
A matter with both a business-loss component and a lifetime-earnings component → consider engaging both, or a forensic CPA who can quantify the financial loss and coordinate with an economist on the projection.

The most expensive mistake is engaging the wrong discipline for the question presented — for example, asking a pure economist to untangle a closely held company’s commingled books, or asking a forensic accountant to build a 40-year wage forecast from statistical tables. Matching the expert to the proof saves time and strengthens the opinion.

Why the Distinction Matters for Admissibility

Whichever expert testifies, the opinion must satisfy the standard for expert testimony — in federal court, Rule 702 of the Federal Rules of Evidence and the Daubert line of cases, and the comparable standard applied in many state courts. That standard asks whether the expert is qualified, whether the methodology is reliable, and whether it fits the facts of the case. The practical point for counsel: the expert’s method has to match the question. An expert applying a methodology outside their core discipline is more vulnerable on cross-examination and on a challenge to admissibility. Selecting the right type of expert at the outset is part of building an opinion that holds up.

How the Firm Approaches Damages Engagements

Joey Friedman CPA PA is a forensic accounting and business-valuation practice. Mr. Friedman is a CPA accredited in business valuation (ABV) and works as a financial expert in litigation — quantifying lost profits, reconstructing income, valuing closely held businesses, and analyzing economic damages in commercial and family-law matters. For engagements that turn on long-horizon personal-injury earnings forecasting, the firm will say so plainly and help counsel determine whether a forensic economist should be added, so the case is matched to the right expertise rather than the nearest one.

Frequently Asked Questions

Is a forensic accountant the same as an economic-damages expert?

No, though the roles overlap. A forensic accountant reconstructs financial events from a party’s records; an economic-damages expert (forensic economist) models economic loss using economic theory and statistical data. Both quantify damages, and one professional can sometimes cover both functions.

Is a forensic economist the same as a forensic accountant?

They are different disciplines. Forensic economists typically hold advanced economics degrees and focus on long-horizon forecasting and present value; forensic accountants are typically CPAs who focus on the detailed analysis of financial records.

Which expert do I need for a lost-profits claim?

A forensic accountant. Lost profits are measured from the business’s own records — its revenue history and the expenses that would have been required to earn the lost revenue.

Which expert do I need for a personal-injury lifetime-earnings claim?

An economic-damages expert / forensic economist is well suited to projecting a working-lifetime of earnings, benefits, and present value. A forensic accountant may also assist if the injured party owned a business.

Can one expert do both?

Often, yes — for commercial and financial damages. A forensic CPA who regularly performs damages analysis can typically quantify the loss without a separate economist. Complex personal-injury forecasting may still warrant a forensic economist.

Does it matter which type of expert I choose for admissibility?

Yes. Expert testimony must meet the reliability standard (Federal Rule of Evidence 702 / Daubert, and comparable state standards). An expert using a method outside their core discipline is more exposed on cross-examination, so matching the expert to the question matters.

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Disclaimer: This article is for general informational purposes only and does not constitute legal, accounting, or tax advice.