Posted by Daniel Perez.
The demand for forensic accountants has been growing rapidly in recent years, especially in divorce cases of the ultra-wealthy. In an article published in Forbes in September, Russ Alan Prince cites divorce by the wealthy as being a key area that drives the need to hire forensic accountants. The rationale behind this drive in demand is that the services provided by forensic accountants is best in the market in determining the true economic value of a couple’s financial assets.
In most wealthy divorce cases, spouses often attempt to conceal assets and inaccurately state their income. This foul play is a common practice in the today’s landscape says practicing forensic accounting James DiGabriele:
It’s impossible to appropriately divide marital assets if everyone doesn’t know just what those assets are and what they’re worth. High-net-worth couples generally have a number of types of assets such as investment portfolios, businesses, collectables, partnerships, and the list goes on. Divorce lawyers are not the professionals that are going to be able to determine the value of all the different assets. That’s the job of the forensic accountant.
The fundamental analytical skills used by forensic accountants qualify them as key players in attempting to circumvent tactics used by spouses to hide assets and income. Forensic accountants investigate these divorce cases in their fundamental training and continuing education in order to meet the prevalence of these cases in practice.
Director of Geltrude & Company’s divorce practice, Ellen Rabasca reaffirms just how common it is for spouses to conceal marital assets in order to reduce their financial liability after the divorce: “When assets are held in trusts or partnerships, or located in different jurisdictions, getting a valuation can be complicated. Also, the valuation of retirement plans, deferred compensation arrangements, and life insurance programs all require the expertise of a qualified accountant.” Forensic accountants offer the services of reviewing tax returns, confirming bank balances, tracing financial transactions, and most importantly, maintaining a high degree of professional skepticism and inquiry in order to determine the true value of assets spouses possess.
Daniel is a graduate student in accounting with a certificate in forensic accounting at the Feliciano School of Business, Montclair State University.