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 North Carolina, forensic accounting is a recognized practice within the field of accounting, particularly relevant in legal contexts such as divorce litigation. State statutes and federal law do not specifically regulate the profession of forensic accounting, but these experts operate under the broader regulatory framework applicable to all accountants, including licensure and ethical standards set by the North Carolina State Board of Certified Public Accountant (CPA) Examiners and the American Institute of Certified Public Accountants (AICPA). In the context of divorce, North Carolina is an equitable distribution state, meaning that marital property is not automatically split 50/50 but rather divided in a manner that is deemed fair by the court. A forensic accountant may be hired by either party to uncover any hidden assets or financial discrepancies that could impact the division of property, spousal support, and child support. Their findings can be critical in ensuring an equitable distribution of assets and proper calculation of support payments. The court may also rely on the expertise of a forensic accountant to resolve complex financial matters during the divorce proceedings.