When your attorney suggests hiring a forensic accountant, your immediate thoughts may be: “Why would I waste money on an accountant?”, “How much is that going to cost me?”, and “How will that benefit me?” We’re here to answer your questions and explain why we often work with forensic accountants.
What is a Forensic Accountant and What Do They Do?
A forensic accountant can provide the court with expert testimony regarding a couple’s or a parent’s finances. A forensic accountant is helpful, and even necessary, when one party hid or attempted to hide assets or income. A forensic accountant in a divorce will conduct a thorough review of financial records. This includes analyzing bank statements, credit card statements, tax returns, and other financial documents to identify any discrepancies or inconsistencies. The forensic accountant will also look for any patterns of spending that may indicate hidden assets or undisclosed income, such as large cash withdrawals or transfers to other accounts.
Let’s consider a situation where one uses a forensic accountant. Mom hires our firm for a child support or spousal support case, or for divorce and describes the couple’s affluent lifestyle, indicating spending of a couple hundred thousand dollars per year from dad’s self-employment income. During the discovery stage, Dad provides sworn answers claiming $110,000 in annual gross income. Our team immediately starts working with a forensic accountant. With our team’s investigation and discovery, we provide the forensic accountant with evidence, such as Dad’s bookkeeping records and software, and soon we learn that the husband failed to disclose shareholder distributions to himself as part of his income, he expensed his entire home mortgage, and he did not disclose a host of perquisites. Ultimately, we successfully argue that dad earned $220,000 and child and spousal support are calculated accordingly. Our recommendation for the client to engage a forensic expert was money well spent.
Forensic Accountants Provide Expert Testimony in Court Proceedings
One of the important aspects of a forensic accountant’s role in a divorce is to provide expert testimony to the court. Sometimes each party hires a forensic accountant and both experts provide testimony to the court. If you are faced with a situation in which you believe your spouse is hiding assets or income, you need an unbiased and objective analysis of the financial information. This is critical to ensuring that the distribution of assets is fair and equitable for both parties. A forensic accountant will work with the attorneys and the court to provide information and expert testimony that will assist with the final determination of the division of assets.
If you are faced with a divorce, or a child support or alimony case, where your spouse does not disclose what you think is their accurate amount of income or you expect them to not be forthright about their income, contact our family law attorneys at 616-285-0808 to schedule a complimentary consultation to discuss our services.
