Forensic Accounting for Divorce
Forensic accounting is a special practice area of accounting. It involves investigating financial and other data, and preparing expert-level evidence that is submitted in court (that is why the term forensic is used).
Forensic accountants work in a multitude of fields, including insurance and other areas. However, those that deal specifically with Divorce are focused on helping a spouse achieve a fair and equitable settlement or judgement by ensuring that the other spouse is acting honestly and disclosing correct, complete financial information. This includes both asset and debt levels.
Here are some of the areas that a forensic accounting practitioner will focus on during her or his investigation for Divorce:
- Identifying “questionable” financial transactions that can relate to either personal or business expenses
- Analyzing business declines to ensure that it’s not being done to temporarily drive down value
- Analyzing tax returns to ensure that lifestyle is reflected by income levels (to prevent spouses delaying in reporting their income until after the Divorce)
- Fraudulent or questionable cash transactions or write-offs
- Hidden bank accounts
- and more..
Remember: Divorce Can Bring out the Worst in People
It’s said that criminal lawyers sometimes see bad people on their best behavior, while family lawyers and forensic accounting practitioners who specialize in Divorce often see good people on their worst behavior. This is because the pressure and trauma of Divorce — not to mention the anger and sadness — can convince otherwise “good” people to do things that, under normal circumstances, they simply wouldn’t do. Regrettably, these bad acts can include manipulating or withholding financial information during Divorce. While this is against the law, unfortunately, it can, does and will continue to happen.
As such, even if you have an “honest spouse,” bringing in the services of a forensic accounting practitioner can be a prudent idea — because, as mentioned, Divorce can bring out the worst in people. Furthermore, your spouse may in fact submit estimates or other financial information that he or she sincerely believes is accurate, but may, in fact, turn out to be grossly inaccurate. You don’t want to discover this after the Divorce, when re-opening a Divorce financial settlement agreement is costly, time consuming, and risky.
The Forensic Accounting Offices of Cathleen Collinsworth will work with you and your family lawyer in a methodical and cost-effective way to ensure that financial information presented to the courts by your spouse is accurate and complete. Cathleen is a Certified Divorce Financial Analyst (CDFA®) and a Master Analyst in Financial Forensics (MAFF®) who practices forensic accounting.