A forensic accountant is generally an accountant with expertise in detecting financial fraud or manipulation in personal and business tax returns, bank accounts, investment accounts, retirement accounts, broker accounts, offshore accounts, cash, cryptocurrency, jewels, art, cars, yachts, airplanes, real estate, life insurance policies, and related financial documents. This financial investigation work is often referred to as tracing, financial tracing, asset tracing, or forensic accounting, and generally involves “following the money” by tracing a piece of financial information or data back to its source.

In divorce litigation—and especially in high-asset or high-net-worth divorces in which there is significant marital or community property—any financial manipulation or fraud of personal or business finances may have a significant effect on the marital or community property that is available for division, and on spousal support and child support payment amounts. One or both spouses in a divorce may hire a forensic accountant to discover any hidden assets or manipulated financial documents that may prevent the court from having an accurate accounting of the marital or community property assets and the spouses’ incomes.

In California, forensic accountants play a crucial role in divorce litigation, particularly in cases involving high-net-worth individuals or substantial marital assets. These specialized accountants are trained to uncover financial fraud and manipulation within a wide array of financial documents and assets, including tax returns, bank and investment accounts, and tangible assets like real estate and luxury items. Their expertise in financial tracing allows them to follow the money trail and identify hidden assets or discrepancies in financial reporting. The findings of a forensic accountant can significantly impact the division of marital or community property, as well as the determination of spousal and child support payments. California law requires an equitable division of marital property, and accurate financial information is essential for ensuring a fair distribution. Either spouse may retain a forensic accountant to ensure transparency and protect their financial interests during divorce proceedings.