When Arizona couples divorce, financial matters often become a battleground. Whether both spouses work or have assumed traditional roles of provider and homemaker, both spouses want to ensure that they get their fair share of the money and other assets they have accumulated during the marriage. This can be especially true in high net worth divorces, but the high value of these divorces often leads to disagreements over the value of assets or even the existence of those assets. A forensic accountant may be able to help couples ensure that all assets are accounted for and fairly valued. If you want to learn more about getting divorced when you and your spouse have significant assets, Sullivan Shick may be able to address your concerns during an initial consultation. Call (480)719-2558 to schedule an appointment at our Mesa, Phoenix, or Peoria office and learn more about your legal options.
What Is a Forensic Accountant?
A forensic accountant is a specialized certified public accountant (CPA). While they have experience in traditional accounting matters, their job is to research complex financial issues. This can be for high net worth divorces, but can also be for law enforcement, financial institutions, insurance companies, or other reasons.
Forensic accountants are experts at finding hidden assets or other financial issues that could complicate a divorce. They are often brought in for high net worth divorces to ensure that there are no hidden, forgotten, or unrecorded assets that are left out. Typically, one spouse or their attorney hires the forensic accountant because they suspect their spouse may be hiding assets or to evaluate a business or other significant assets and determine their value.
What Is the Role of a Forensic Accountant in a High Net Worth Divorce?
In the most basic terms, a forensic accountant’s role is to analyze the financial statements of both parties. They are often called in when one or both spouses have an unusually high number of assets or a financial portfolio that is complicated in some way to ensure all assets are accounted for. A.R.S. §25-211 states that Arizona is a community property state, with all property acquired during the marriage being marital property. Exceptions to this include assets acquired by devise, descent, or gift, and anything acquired after service of a petition for dissolution of marriage, annulment, or separation if the petition is successful.
Their role is often much more detailed than that, however. Often, they begin by reviewing affidavits and other financial documents required in a divorce for discrepancies. They can investigate discrepancies, act as an expert witness for the valuation of assets, locate hidden assets, identify separate and marital assets, determine a spouse’s ability to pay child and spousal support, and appraise complicated assets such as property, businesses, or stocks. They will often perform many of these in a single case.
What Do Forensic Accountants Use To Do Their Jobs?
Typically, a forensic accountant will use personal and business documents that reveal any financial information about one or both spouses. These documents can include financial statements, tax returns, sales invoices, business contracts, bank statements, and mortgage applications. They can also use financial projections.
Depending on the types of assets they are looking for, they may also use public records, and financial information that includes other people’s financial information, such as business partners or family or friends who are listed as co-owners of an asset. While forensic accountants are often used to discover malicious intent, they can also find forgotten assets and ones that do not have records.
Can a Regular Certified Public Accountant Act as a Forensic Accountant?
A CPA is not the same as a forensic accountant. A forensic accountant is required to have a CPA license, but if the individual only has a CPA license, they cannot act as a forensic accountant. Forensic accountants have specific additional accreditations with specialized training that teaches them what to look for in the records they analyze and examine.
These accreditations include:
- ABV – Accredited in Business Valuation from the American Institute of Certified Public Accountants (AICPA)
- CFF – Certified Financial Forensics from the American Institute of Certified Public Accountants
- CFE – Certified Fraud Examiner from the Association of Certified Fraud Examiners
- CVA – Certified Valuation Analyst from the National Association of Certified Valuation Analysts
- MAFF – Master Analyst in Financial Forensics from the National Association of Certified Valuation Analysts)
Forensic accountants do not need to hold all of these certifications, but they should have at least one. Individuals do not have to seek out a forensic accountant on their own. An experienced divorce attorney with Sullivan Shick may be able to suggest one in Mesa, Peoria, or Phoenix that they have worked with in the past who may be able to assist in your case.
Who Needs a Forensic Accountant?
The circumstances of each divorce are unique, therefore there is no clear answer as to who might need a forensic accountant. However, there are some common divorce situations in which forensic accountants are brought in. Most often, they are used in high net worth divorces.
If a spouse suspects their partner is hiding assets or believes their spouse has an unfair advantage financially, they may want to consider a forensic accountant. Additionally, spouses who have maintained traditional roles where their spouse managed the finances and they have little to no knowledge of their financial situation may want to have a forensic accountant go over the assets to ensure they are fully informed.
Who Pays for a Forensic Accountant?
Most of the time, the spouse who wants the services of a forensic accountant is the person who pays for those services. If the divorce is amicable, and the couple wants to use a forensic accountant to ensure a fair division of assets, they may agree to share the expense. In some circumstances, the court may order the use of a forensic accountant and the court will order one or both spouses to pay for the services.
Do You Have Additional Questions About Your Arizona High Net Worth Divorce?
Whether your divorce is friendly and cooperative, or fraught with frustration and suspicion, using an expert to ensure every important detail is accounted for is never a bad idea. Particularly in high net worth divorces, the use of a forensic accountant can ensure a fair division of assets, clear valuation of businesses, and locate any hidden, forgotten, or unrecorded assets. The value they provide is often worth the expense. If you have more questions regarding divorce or forensic accounting, consider speaking with one of our compassionate and knowledgeable Arizona divorce attorneys. Call Sullivan Shick at (480)719-2558 to schedule an appointment and review your case.