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 Colorado, forensic accountants play a crucial role in divorce litigation, particularly in cases involving high-net-worth individuals or substantial marital assets. Colorado operates under the principle of equitable distribution, meaning that marital property is divided in a manner that is fair, though not necessarily equal. Forensic accountants are hired to uncover any hidden assets, undisclosed income, or financial fraud that could impact the equitable division of property, as well as the determination of spousal and child support. Their expertise in tracing and financial investigation helps ensure that all assets and income are accurately represented and considered during the divorce proceedings. The findings of a forensic accountant can be pivotal in court decisions regarding the division of assets and the calculation of support payments. It is important to note that while forensic accountants provide valuable financial insights, their involvement and the admissibility of their findings in court are subject to Colorado's rules of evidence and procedure.