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 Pennsylvania, forensic accountants play a crucial role in divorce proceedings, particularly in cases involving high-net-worth individuals or complex asset portfolios. Their expertise is utilized to uncover financial discrepancies, hidden assets, and evidence of fraud or manipulation within financial documents. Pennsylvania is an equitable distribution state, meaning that marital property is not automatically split 50/50 but rather divided in a manner that is fair and equitable, which may not necessarily be equal. The findings of a forensic accountant can significantly influence the division of assets, as well as spousal and child support determinations, by providing a clear picture of the true financial situation of both parties. The use of forensic accountants is not mandated by law but can be initiated by either spouse or ordered by the court to ensure a just and accurate assessment of the marital estate. Their work ensures that all assets are properly accounted for and valued during the legal proceedings, allowing the court to make informed decisions regarding asset division and support obligations.