Cathleen Collinsworth, a Certified Divorce Financial Analyst® in Irvine, answers:
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. Forensic accountants work in a multitude of fields, including family law, insurance, and other areas. However, those that deal specifically with divorce are focused on helping a spouse achieve a fair and equitable settlement or judgment by ensuring that the other spouse is acting honestly and disclosing correct, complete financial information – including asset and debt levels.
Some of the areas a forensic accounting practitioner might focus on during her or his investigation for your divorce include:
- Identifying questionable financial transactions that can relate to either personal or business expenses;
- Analyzing business declines to ensure they’re not being done intentionally to temporarily drive down value;
- Analyzing tax returns to ensure the lifestyle is reflected by the income levels and to prevent spouses from being able to delay reporting their income until after the divorce;
- Fraudulent or questionable cash transactions or write-offs;
- Hidden bank accounts.
Cathleen Collinsworth is a lawyer at Forensic Accounting Offices in Orange & Riverside County, Irvine & Menifee, California.