Why Do I need a Forensic Accountant for my Divorce?

divorced couple

Forensic accounting plays a critical role in the preparation and examination of financial records and statements. Combining all facets of accounting, investigating, and auditing, forensic accountants are tasked with the responsibly to deliver an accounting analysis suitable for court. The specialized skillset of a forensic accountant has led to their place in the modern day legal team. From government to public accounting to industry, the function of a forensic accountant utilizes a strategic combination of business background and forensic experience in order to strengthen the litigation team’s ability to navigate complex accounting and legal issues.

Divorce and forensic accounting are commonly discussed jointly. The process of legally ending a marriage can get ugly, most often in regard to the division of marital assets and debts. In some cases, the division process is a simple split of bank accounts, cars, houses, credit card bills, etc. In a lot of cases, however, the intricacies of division is considerable when complex financial portfolios are involved. Even if the personal issues between the two divorcing parties are cordial, dividing assets can be very difficult. And in many situations, the divorcing parties are far from cordial, making the process of dividing the assets dirty and complicated. Here is where a forensic accountant comes along to investigate, audit, and unearth even the most hidden of assets.

divorced couple

Determining a spouse’s exact income is much more challenging than many would imagine. Below are just a handful of common roadblocks a spouse must hurdle in a divorce:

  • Understating/underreporting income
  • Hidden assets
  • Income classifications
  • Padding payroll
  • Incorrect valuation of major assets
  • Moving assets to a dummy company
  • Creation of fake debt
  • Using secret cash to buy expensive items
  • Overpaying creditors
  • And so on

A forensic accountant has the highly-skilled, specific training to investigate the personal and business financial records in order to determine not only what the spouse shows, but more importantly, what the spouse is withholding. The process of reviewing stacks upon stacks of paperwork will lead to the unveiling of wrongdoings and financial truths that are critical to a divorce team.

The ability to hire a team of professional experts is vital to a successful divorce process. When a married couple with a complex financial portfolio decides to divorce, hiring a forensic accountant is essential to ensuring that a fair, truthful division of assets and debts results.