What Is The Role Of A Forensic Accountant In A Divorce?
We all know that divorce can be an emotional experience, but if you look at it closely, it’s merely a matter of ending a contract between two parties. And one of the most contentious parts of a divorce involves money, and which party will end up with the more valuable assets.
Much of this starts with the person that’s handling the checkbook. In many marriages, one spouse typically takes care of the finances. This person is the one that pays the bills, deals with investments, makes donations to charities, etc. Then, when the marriage ends up headed for divorce, this person is the one that also usually knows the most about the couple’s assets and financial health, with the other being left in the dark.
That is when it is helpful to retain a Forensic Accountant. The term “Forensic Accountant" refers to a professional who performs an orderly analysis, investigation, inquiry, test, inspection, or examination in an attempt to obtain the truth and form an expert opinion.
A Forensic Accountant can handle many financial matters in your divorce case. The accountant can review your assets and liabilities to calculate your and your spouse's net worth that can help with your negotiations or to present as evidence to the Judge. If a business is involved, the Forensic Accountant can also evaluate the business to determine the value of the business as well as the amount of income the business produces.
Are There Hidden Assets?
When one spouse is in control of all the finances and the other spouse is in the dark, many of the couple’s assets may end up hidden. Common types of hidden assets include cash, bonds, insurance policies, mutual funds, stocks, and annuities. Some of these assets may be converted into cash and then used to purchase luxury items, such as jewelry, art, antiques, vehicles, and collectible items.
A Forensic Accountant works to uncover assets and to provide expert testimony at the divorce hearing. This person will use several methods for uncovering anything that may be hidden from the other party. He or she may start by asking about the spouse’s habits in order to determine potential locations where assets may be kept. Forensic Accountants may also review tax returns, financial statements, property deeds, and other records.
What Are The Qualifications For A Forensic Accountant?
Forensic Accountants can obtain a number of accreditations. Their accreditations may mean they will play a more defined role in your divorce case.
Certified Public Accountant (CPA) - Being a CPA means the accountant has completed a Bachelor’s degree in accounting, has passed the Uniform Certified Public Accountant Examination, and has met state or jurisdiction-specific education and experience requirements. Each state has their own Boards of Accountancy that grant CPA certification and licensure. There are certain services that only licensed CPAs are legally allowed to perform. A number of specialty designations also first require the CPA designation.
The Certified Forensic Accountant (CRFAC) designation assesses a CPA’s knowledge and competence in professional forensic accounting services, including fraud, litigation services, cyber security issues, and valuations.
The Certified Fraud Examiner (CFE) credential denotes proven expertise in fraud prevention, detection and deterrence.
The Certified in Financial Forensics (CFF) credential is for CPA’s who specialize in forensic accounting. The CFF credential is granted exclusively to CPA’s who demonstrate considerable expertise in forensic accounting through their knowledge, skills, and experience. They are also required to take a CFF exam.
The National Association of Certified Valuation Accreditation (NACVA) provides a number of certifications in areas of asset valuation and financial litigation.
Appraising assets is an unregulated industry, and the American Society of Appraisers (ASA) is the only major appraisal organization designating members in all appraisal specialties.
Much of this starts with the person that’s handling the checkbook. In many marriages, one spouse typically takes care of the finances. This person is the one that pays the bills, deals with investments, makes donations to charities, etc. Then, when the marriage ends up headed for divorce, this person is the one that also usually knows the most about the couple’s assets and financial health, with the other being left in the dark.
That is when it is helpful to retain a Forensic Accountant. The term “Forensic Accountant" refers to a professional who performs an orderly analysis, investigation, inquiry, test, inspection, or examination in an attempt to obtain the truth and form an expert opinion.
A Forensic Accountant can handle many financial matters in your divorce case. The accountant can review your assets and liabilities to calculate your and your spouse's net worth that can help with your negotiations or to present as evidence to the Judge. If a business is involved, the Forensic Accountant can also evaluate the business to determine the value of the business as well as the amount of income the business produces.
Are There Hidden Assets?
When one spouse is in control of all the finances and the other spouse is in the dark, many of the couple’s assets may end up hidden. Common types of hidden assets include cash, bonds, insurance policies, mutual funds, stocks, and annuities. Some of these assets may be converted into cash and then used to purchase luxury items, such as jewelry, art, antiques, vehicles, and collectible items.
A Forensic Accountant works to uncover assets and to provide expert testimony at the divorce hearing. This person will use several methods for uncovering anything that may be hidden from the other party. He or she may start by asking about the spouse’s habits in order to determine potential locations where assets may be kept. Forensic Accountants may also review tax returns, financial statements, property deeds, and other records.
What Are The Qualifications For A Forensic Accountant?
Forensic Accountants can obtain a number of accreditations. Their accreditations may mean they will play a more defined role in your divorce case.
Certified Public Accountant (CPA) - Being a CPA means the accountant has completed a Bachelor’s degree in accounting, has passed the Uniform Certified Public Accountant Examination, and has met state or jurisdiction-specific education and experience requirements. Each state has their own Boards of Accountancy that grant CPA certification and licensure. There are certain services that only licensed CPAs are legally allowed to perform. A number of specialty designations also first require the CPA designation.
The Certified Forensic Accountant (CRFAC) designation assesses a CPA’s knowledge and competence in professional forensic accounting services, including fraud, litigation services, cyber security issues, and valuations.
The Certified Fraud Examiner (CFE) credential denotes proven expertise in fraud prevention, detection and deterrence.
The Certified in Financial Forensics (CFF) credential is for CPA’s who specialize in forensic accounting. The CFF credential is granted exclusively to CPA’s who demonstrate considerable expertise in forensic accounting through their knowledge, skills, and experience. They are also required to take a CFF exam.
The National Association of Certified Valuation Accreditation (NACVA) provides a number of certifications in areas of asset valuation and financial litigation.
Appraising assets is an unregulated industry, and the American Society of Appraisers (ASA) is the only major appraisal organization designating members in all appraisal specialties.