The term “forensic accountant” appears at first glance to be oxymoronic. Accountants deal with numbers; forensics relates to the use of science in crime detection. The two terms come together, however, in divorce and civil cases involving large amounts of money. A forensic accountant is usually retained to assist an attorney in investigating and understanding how money or some other asset has been transferred or hidden.
Forensic accountants usually begin a divorce investigation by gathering as much information as possible about the matters at issue. They are looking essentially for evidence of some type of fraud. This fraud is not always the making of a material representation to a prospective investor. In many cases, the fraud consists of concealing assets or transferring money earned in the United States to a bank account in a foreign country. Forensic accountants rely heavily on various computer programs to untangle bank and corporate records that may have been intentionally difficult to read and understand. The most common kinds of records used by forensic accountants are bank statements, credit card statements, journals, ledgers, databases, e-mails and internal memoranda.
Once the relevant information has been gathered, the investigating accountant will interview as many of the potential witnesses as possible. In this regard, the forensic accountant may rely on an experienced trial attorney to obtain relevant documents and compel appearances of essential witnesses at depositions. Some forensic accountants are themselves attorneys, and the double expertise can be very helpful in pulling aside curtains of obfuscation raised by the opposition.
These techniques are used in both civil fraud cases and divorces where one party is suspected of concealing assets. Once the accountant has completed the investigation, the next step is the preparation of trial testimony. In a divorce, the forensic accountant may offer opinions on the value of assets or the extent to which cash has been transferred to one or more off-shore bank accounts.
The basic job of a forensic accountant is to take information that has been deliberately distorted and make the information clear and easily understandable. In a divorce, the work of a forensic accountant may save one party a significant amount of money.