What is Forensic Accounting?

Forensic, according to the Webster’s Dictionary, means

“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

Ron J. Anfuso, CPA, ABV, CFF, CDFA, FABFA is a Forensic Accountant and expert witness in the Los Angeles area. He has over 19 years experience in the valuation, financial, accounting and tax aspects of marital dissolution matters, which includes conducting business valuations, gross cash flow analyses, and tracings, as well as performing Moore/Marsden and other dissolution-related accounting calculations. He is also a founding member of A Better Divorce, and has prepared over 40 collaborative law cases.