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 New York, forensic accountants play a crucial role in divorce litigation, particularly in cases involving high-net-worth individuals or complex asset structures. They are skilled professionals who specialize in uncovering financial fraud and tracing assets by analyzing various financial documents and transactions. Their expertise is often utilized to identify hidden assets or discrepancies in personal and business financial statements, which can significantly impact the equitable distribution of marital property, as well as the determination of spousal and child support obligations. New York operates under the principle of equitable distribution, meaning that marital property is divided in a manner that is fair but not necessarily equal. A forensic accountant's findings can provide critical evidence to ensure that all assets are properly disclosed and valued during the divorce proceedings, allowing the court to make an informed decision regarding the division of assets and support payments. It is not uncommon for either spouse to engage a forensic accountant to ensure transparency and protect their financial interests during a divorce.