marital forensics

How a Forensic Accountant Can Help During a Divorce

Whether there is intense financial conflict or simply confusion, finances continue to remain the center of divorce proceedings for many couples. As a result, divorce attorneys and individuals seeking divorce often require a forensic accountant to fairly and expertly evaluate the couple’s finances, particularly if:

  • Either spouse owns a business or is self-employed
  • Either spouse entered into the marriage with significant separate assets or liabilities
  • Either spouse will have more custody time with the children than the other
  • The property to be divided is more than just a house and retirement funds
  • The property is significant in value and neither spouse can agree on how to divide it

As financial experts with specialized skill sets in investigation, auditing, and accounting, forensic accountants are incredibly useful when it comes to helping achieve complete financial transparency in divorce proceedings.

Identify Joint Assets & Liabilities

Constructing a Marital Balance Sheet

When going through a divorce, it is incredibly important to ensure that the marital property is fairly and expertly evaluated before dividing it. Why? Because if one spouse fails to report certain assets, either intentionally or by mistake, it will significantly affect how the assets are divided and how settlements are decided.

If you need help determining whether an asset is marital or separate, or if an asset has been commingled, then a forensic accountant can investigate and review your accounts to determine which type of property it is. A forensic accountant will identify and report all joint assets and liabilities in a marital balance sheet to help ensure an equitable division of assets.

Assets could include: real estate, bank accounts, cars, investment accounts, retirement accounts, value of a business, employee benefits, and more. Liabilities could include: mortgages, credit card balances, personal loans, and more.

Appraise Assets, Businesses, and Properties

In order to fairly split assets among the parties, the actual values of businesses, properties, and other assets need to be professionally appraised. Forensic accounts will perform business valuations, appraise assets, and obtain appraisers for properties to determine accurate values of marital assets.

Locate Hidden Assets

Intentionally hiding assets has serious consequences, yet many individuals continue to attempt to conceal assets and prevent equitable division. Hiring a forensic accountant can help ensure that all hidden assets are accounted for.

In order to prove the other party is hiding assets, a forensic accountant with examine tax returns, financial statements, bank records, real estate records, insurance policies, and other important documents to uncover discrepancy in reporting. Forensic accounts are experts in financial document analysis and leave no stone unturned in their investigation. They can locate hidden income, hidden bank accounts, off-shore accounts, hidden property, hidden investments, cryptocurrency, and more.

Determine Child Support & Spousal Support

Income Calculations

Forensic accountants perform professional income calculations that aid in the financial decisions (e.g. child support or alimony) being made as a result of divorce. For spouses that will likely pay or receive support, forensic accountants will create an accurate financial picture to ensure fair treatment. They will calculate cash flow using wages, interest, investments, dividends, and cash outflows from a business to develop a precise income. Consequently, an appropriate amount of child support or spousal support can be determined.

Lifestyle Analysis

In addition to calculating the income for either or both of the parties, the forensic accountant may also conduct a lifestyle or marital spending analysis in order to determine appropriate amounts for alimony and/or child support. The forensic accountant will perform a detailed analysis of personal financial records, classify all expenses, and create an accurate picture of marital spending to establish how the parties lived.

Strategize the Division of Assets & Liabilities

A forensic accountant uncovers crucial financial information that affects how marital assets with be divided. As independent experts, forensic accountants will ensure that marital property is fairly evaluated and that all liabilities are accounted for. They will also work with you and your divorce attorney to strategize an equitable division of these assets and liabilities and provide valuable input on the settlement process.

In addition, how assets are divided in a divorce can have serious tax implications—a knowledgeable forensic accountant can help you understand and prepare for any potential liabilities.

Litigation Support Services

Should a settlement not be reached and the divorce goes to trial, the forensic accountant will act as an expert witness and provide expert witness testimony in court or at depositions. As expert witnesses, forensic accountants are essential in helping the court understand complex financial issues at heart of the case and clearly presenting an objective, professional opinion on the matter. In addition to presenting their conclusion and explaining their findings in court, forensic accountants can also:

  • Assist in discovery and preparation for deposition or trial
  • Help develop compelling opening arguments, direct examination, and cross examination
  • Review and comment on the strengths and weaknesses of the opposing expert

Speak to an Expert

Having a forensic accountant help you and your legal team navigate a complicated financial situation is key to achieving the best possible outcome. The best time to contact a forensic accountant on a divorce matter? The earlier, the better.

If you would like to learn more about how Fact Finder Forensics can assist you or your client in a divorce matter, contact us today and book some time to speak with our experts.


Rebuilding Your Books with a Forensic Account

Has your business fallen behind in keeping accurate books?

This is the case for many businesses, but the COVID-19 pandemic exposed the detrimental impacts of not having proper books and records. Financial records easily fall into a state of disarray as business owners focus on building their operations and growing their business. For many businesses, the pandemic made it all to clear how important properly kept books can be. As a result, countless businesses are currently operating with erroneous, incomplete, or missing books.

Having proper accounting records is crucial to business owners not only to gain insights into their performance, make strategic business decisions, and maintain efficient operations—but also to meet statutory compliance, file accurate financial reports, and to be prepared in case of an audit.

Reconstruction of accounting records may also be necessary if a business is undergoing a Merger & Acquisition or organizational change, is migrating existing records to a new system, has identified issues found in an internal or external audit, or if their financial data has recently been lost or destroyed.

It’s not too late to rebuild and get back on track.

One of the best things businesses can do to strengthen operations as they transition into the post-pandemic economy is to pivot their accounting practices and rebuild their books. It is not enough to rely on accounting software, which only provides the most rudimentary of error checks. When it comes to reconstructing months or years of inaccurate, incomplete, or nonexistent recordkeeping, your business needs to retain a forensic accountant to piece it back together and get the full picture.

Forensic Accounting: Recordkeeping & Books Reconstruction

Reconstruction of accounting books can be extraordinarily complex, especially when those financial records are in a state of chaos. As a result, it is a task best left in the hands of a financial expert, such as a forensic accountant, who can unravel the most convoluted financial matters.

Forensic accountants are highly-trained financial experts who use their accounting and auditing skills to investigate fraud. However, their proficiency in financial investigations and ability to reconstruct financial facts also allow them to serve as expert bookkeeping and accounting professionals.

Consequently, forensic accountants are the ideal professionals to use when accounting records need to be completely reconstructed from messy or missing source material and to make sense of dead ends. They have the investigative skills and technical experience needed to rebuild transactional trails, to get your books compliant, and your accounting back in order.

Fact Finder Forensics: Financial Data Reconstruction

While rebuilding your accounting records, our experienced team will:

  • Identify and find critical source documents needed for analysis
  • Use forensic technologies to restore necessary financial transactions
  • Analyze source documents (bank account records, credit cards, invoices, payroll records, etc.)
  • Reassemble meaningful data and manually reorganize large datasets
  • Fix errors, omissions, and oversights
  • Create an accurate database of financial transactions
  • Ensure records can withstand examination or an audit

Fact Finder Forensics has the expertise and resources to quickly and efficiently rebuild your business’s books in order to restore operational stability, improve productivity, and establish a solid foundation for future recordkeeping.

Recover & Thrive

The goal of bookkeeping is to organize financial information in such a way that it can be readily analyzed for making budgets, projections, strategic decisions, and filing accurate reports. With the forensic technology and expertise available to our forensic accountants, your business can fully recover from mismanaged financial records and trust in the quality of the reconstruction.

If you would like to find out more about how Fact Finder Forensics can help your business recover from mismanaged financial records and rebuild your books, contact us today and book a consultation.

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