What Is Forensic Accounting?

 Posted on July 05,2016 in Division of Property

Forensic accounting is the practice of using accounting skills to uncover acts of fraud or embezzlement. It can be used in a variety of situations, such as determining whether a financial adviser or other trusted party is embezzling money from his or her clients or determining whether a business is actually a front for a money laundering operation. In a divorce case, forensic accounting can be used to uncover assets that an individual is attempting to hide from his or her partner in an effort to come away from the divorce with a greater share of the couple's marital asset pool. If you suspect your partner is doing this, speak with your divorce attorney about your options for using forensic accounting to recover the assets.

How Does a Forensic Accountant Find Assets?

A forensic accountant is an accountant who uses investigative skills to determine how money is earned, invested, saved, and spent. Forensic accountants use multiple methods to trace assets. A few of these methods are listed below:

• Using public records to examine all business financial statements and loan applications connected to the individual allegedly hiding assets and any corporations connected to him or her;   
• Analyzing the family's lifestyle and expenses to determine if the individual's reported income level is sufficient to cover these expenses. If there is a discrepancy between the individual's reported income and his or her apparent expenses, the forensic accountant may investigate his or her income and expenses more closely;    
• Analyzing personal, business, and fiduciary tax returns;    
• Using asset locator techniques to uncover hidden accounts opened by the individual in question; and    
• Forensic review of all disbursements made to bank and brokerage accounts.    

How Attorneys Find Hidden Assets

Although a forensic accountant may be employed to find the assets you suspect your spouse is attempting to hide from you, your lawyer will also play a role in this process. During your case's investigation stage, the point at which both attorneys determine all relevant facts at play from the divorcing parties, your spouse may be asked, under oath, to discuss his or her income and assets in detail. Your attorney might cite specific discrepancies brought up by the forensic accountant and ask your spouse to discuss them. He or she might also ask about recent purchases, such as a new car.

Sometimes, individuals attempt to lower their apparent net worth by delaying promotions and raises at work. Your attorney might also ask about this during his or her investigation.

Work with a Kane County Divorce Attorney

If you are considering ending your marriage, be sure to contact an experienced Kane County divorce attorney right away to discuss the process and how you can protect your rights throughout it. Our team at the Goostree Law Group is here to help you by providing you with the legal advice and representation you need as you move through the divorce process. Contact our firm today to schedule your initial legal consultation with a member of our team.  

Sources:

http://www.acfe.com/career-path-forensic-accountant.aspx

http://www.lorman.com/resources/the-role-of-forensic-accountants-in-divorce-engagements-14898