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 South Carolina, forensic accounting is a recognized practice within the legal and financial fields, particularly in the context of divorce litigation. State statutes and case law in South Carolina acknowledge the importance of accurate financial representation in divorce proceedings. When there are suspicions of financial fraud or manipulation, a forensic accountant may be hired by one or both parties to investigate and trace assets and financial transactions. This process is crucial in ensuring an equitable division of marital property and the fair determination of spousal and child support. South Carolina is an equitable distribution state, which means that marital property is not automatically split 50/50 but rather divided based on what the court deems fair. The findings of a forensic accountant can significantly influence the court's decisions regarding asset division and support obligations by uncovering hidden assets or income, thereby providing a more complete financial picture. While South Carolina does not have specific statutes that detail the role of forensic accountants in divorce cases, their expertise is often utilized in high-asset or complex financial situations to ensure transparency and fairness in the financial aspects of divorce settlements.