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 South Dakota, as in other states, forensic accountants play a crucial role in divorce litigation, particularly in cases involving high-net-worth individuals or complex asset portfolios. These professionals are skilled in examining and interpreting financial documents to uncover any instances of fraud or manipulation. Their expertise is often utilized to trace and identify hidden assets, ensuring that all marital property is accurately accounted for during the division process. South Dakota follows the principle of equitable distribution, meaning that marital property is divided in a manner that is fair but not necessarily equal. The findings of a forensic accountant can significantly influence the determination of what is considered fair, impacting the division of assets, as well as spousal and child support calculations. While South Dakota state statutes do not specifically regulate the practice of forensic accounting, these professionals are generally required to adhere to the standards of their industry and may be certified by professional organizations such as the American Institute of Certified Public Accountants (AICPA). When forensic accountants are involved in legal proceedings, their work must comply with applicable laws and court rules regarding evidence and expert testimony.