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 Iowa, forensic accounting is a specialized field where accountants use their expertise to uncover financial fraud and manipulation, particularly in the context of divorce litigation. Iowa law, similar to other states, requires an equitable division of marital property in divorce proceedings. When significant assets are involved, it becomes crucial to have an accurate assessment of the couple's finances. A forensic accountant may be hired by one or both parties to investigate and trace financial transactions to ensure that all assets are accounted for. This process can reveal hidden assets or discrepancies in reported income, which can significantly impact the division of property, as well as spousal and child support determinations. The findings of a forensic accountant can be used as evidence in court to argue for a fair distribution of assets. While Iowa does not have specific statutes governing the practice of forensic accounting, the principles of equitable distribution and the need for full financial disclosure in divorce cases underpin the importance of this field.