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, asset tracing, or forensic accounting, 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 Alabama, forensic accounting is a specialized field where accountants use their expertise to uncover financial fraud and manipulation, particularly in the context of divorce litigation. Alabama is an equitable distribution state, meaning that marital property is divided in a manner deemed fair by the court, which may not always be equal. Forensic accountants play a crucial role in high-asset or high-net-worth divorce cases by conducting financial investigations to ensure an accurate assessment of marital assets and individual incomes. This process, known as financial tracing or asset tracing, involves analyzing various financial documents and transactions to locate hidden assets or uncover any discrepancies that could affect the division of property, as well as spousal and child support determinations. The findings of a forensic accountant can significantly influence the court's decisions regarding the distribution of assets and support payments. It is important for parties in a divorce to disclose all assets truthfully, as failure to do so can result in legal consequences, including penalties and an unfavorable division of assets.