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 or secreted 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.

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 Iowa, during divorce proceedings, the equitable distribution of assets requires an accurate assessment of the marital property. When high-asset or high-net-worth divorces occur, it's not uncommon for one or both spouses to engage a forensic accountant to ensure a fair division of assets. Forensic accountants specialize in uncovering financial discrepancies, hidden assets, and fraud. They scrutinize various financial documents and assets, including tax returns, bank and investment accounts, retirement funds, and tangible assets like real estate and luxury items. The process, known as financial tracing or forensic accounting, is crucial in determining the true financial standing of both parties, which in turn affects the division of assets, as well as spousal and child support determinations. Iowa courts rely on the findings of forensic accountants to ensure an equitable division of property and to set appropriate support amounts. If financial manipulation or fraud is discovered, it can significantly impact the outcome of the divorce settlement.