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, or asset tracing, 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 California, forensic accountants play a crucial role in divorce litigation, particularly in cases involving high-net-worth individuals or substantial marital assets. Their expertise in financial investigations, or asset tracing, is utilized to uncover any hidden assets or financial fraud that could impact the equitable division of marital property, as well as the determination of spousal and child support payments. California is a community property state, meaning that all assets and debts acquired during the marriage are considered jointly owned and should be divided equally upon divorce. Forensic accountants are tasked with ensuring that all such assets are properly disclosed and valued. They analyze personal and business tax returns, bank and investment accounts, and other financial holdings to trace funds back to their source and provide an accurate picture of the couple's finances. The findings of a forensic accountant can be pivotal in court proceedings, as they help to ensure that the division of assets and determination of support payments are based on complete and truthful financial information.