What is Forensic Accounting?

Forensic, according to the Webster's Dictionary, mean

• "belonging to, used in or suitable to courts of judicature or to public discussion and debate"
• "pertaining to or employed in legal proceedings or argumentation."

Accounting, as defined by The Random House Dictionary, is "the system of organizing, maintaining ... the financial records of a company or an individual."

Forensic Accounting, then, is the practice of accounting in support of litigation. A Forensic Accountant provides an accounting analysis suitable to the court that will form the basis for discussion, debate and ultimately judicial decision. A Forensic Accountant utilizes specialized accounting skills to conduct an investigation into the actual earnings and income stream of individuals and businesses. A benefit of employing a Forensic Accountant is for his or her ability to communicate financial information clearly and concisely in a courtroom setting.

After a Forensic Accountant is retained for a marital dissolution case, he or she typically would:

• Assist the attorney in defining the accounting matters
• Assist the attorney with discovery requests
• Summarize and analyze financial data and transactions
• Prepare reports and declarations
• Perform complex business valuations under family law rules
• Attend depositions to support opposing witness examination
• Assist in settlement negotiations
• Assess tax aspects of proposed settlements
• Assess issues for trial
• Prepare court exhibits for trial
• Testify as an expert witness in trial, if necessary
• Support attorney in witness cross examination at trial
• Review judgment for accuracy of findings