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 New York State, forensic accounting is a recognized practice within the field of accounting, particularly relevant in legal contexts such as divorce litigation. Forensic accountants are professionals who specialize in uncovering financial fraud, inconsistencies, and manipulations across various types of financial documents and assets. Their expertise is crucial in high-asset or high-net-worth divorce cases where accurate valuation and division of marital property are contested. New York's equitable distribution laws require a fair division of marital assets during a divorce, which necessitates a precise assessment of the couple's finances. A forensic accountant may be hired by either spouse to trace and document financial transactions to ensure that all assets are accounted for in the settlement. This can affect the determination of spousal support and child support, as these are influenced by the parties' financial circumstances. The findings of a forensic accountant can be pivotal in presenting evidence to the court to ensure an equitable division of assets and proper calculation of support obligations.