Using a forensic accountant can help reveal essential information during the divorce preparation stage and provide vital divorce documentation once everything has started. For example, forensic accounting services can calculate how much money is available for alimony payments and child support, trace community assets and liabilities, and uncover hidden assets and income streams. To find out more about forensic accounting in divorce and how it can help you, keep reading...
While it is not possible to discuss everything as it relates to forensic accounting in divorce in the space of one short article, here is an overview of the process, discussed in varying levels of detail. No one-size fits all.
This article does not constitute legal advice or specific advice of any sort. Be sure to consult with your family law attorney and other appropriate professionals as each situation is different. For ease of reference in this article, an ex-spouse or soon-to-be-ex-spouse has simply been referred to as “spouse.”
Consider the following:
Very simply put, forensic accounting is accounting that is used in a legal setting.
In a divorce scenario (which may include child support issues), a forensic accountant may be interested in various types of documentation, both business and personal, that can reveal financial information about a spouse. This can include such things as tax returns, accounting records and financial statements, bank statements, cancelled checks, credit card statements, appointment books, sales invoices, business contracts, financial projections, mortgage applications and other documentation.
Depending on the particular circumstances, your attorney’s requirements, and the terms of the engagement, some of the ways in which a forensic accounting can be used in divorce scenarios are as follows:
Although you are probably not a financial expert, you may be in a position to help your forensic accountant. You may think this unlikely, but in better times, you may have been privy to the source and use of your spouse’s funds. You may have also visited a business owned or co-owned by your spouse and have an understanding of what documents and records are maintained and in what media.
You are also probably familiar with the habits of your spouse and may be familiar with their close relationships (those people may assist your spouse in hiding money), travel habits (these may reveal off-shore bank accounts or the existence of a paramour) and attitude towards risk-taking (this may help determine possible strategies used by a spouse to hide assets), etc. Information that may at first seem insignificant to you may be extremely useful to a forensic accounting specialist.
If you are unsure of whether or not a piece of information is important, it is probably wise to let your forensic accountant and attorney know.
Often in divorce scenarios, a party getting divorced is emotionally exhausted and wants to hand over control to the professionals hired to help them through the process. It is important for you to stay engaged, though, as forensic accountants may be able to benefit greatly from any input that you may have to offer. And by doing so, you may be able to reduce the amount of time and money involved in the divorce process as a whole.
The thoughts in this article are only the present thoughts and opinions of the author and do not constitute mandates or instructions. Consult with your attorney and other appropriate certified professionals as needed, or if you are unsure.
Copyright Saul Gordon. All rights reserved.
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About the Author: Saul Gordon is the owner of SGI Consulting, a forensic accounting and consulting firm located in Newport Beach, Orange County, California. He is a Certified Public Accountant, Certified Fraud Examiner, and Certified Internal Auditor. He has testified in court in criminal and civil trials. He may be reached at 949-278-3599 or his website at www.sgiforensic.com
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