Forensic Accounting

Business Commercial Valuation
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state, Trust, Gift, ESOP, Financial, 409a, IP/Patent, M&A
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Infrastructure Capital & Industrial Assets

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            213-251-2400        

 
email: david@myaacg.com
 
David Hahn, CVA, ASA, MAFF, CM&AA, CCIM, MBA

What is Forensic Accounting?

The term “forensic accounting” has seen a wide increase in usage over the past few years. Not only is the term forensic accounting being used more frequently, but it is being applied to many diverse situations resulting in its meaning becoming less precise.

A meaningful definition of forensic accounting is as follows: Skillfully applying a body of accounting and finance knowledge in an investigative manner whereby its conclusions meets the standards that can be used in a court of law. 

The following are common areas for the forensic accounting. Each headline is explained in detail.




Matrimonial Family Law Forensic Accounting Services

The work of a forensic accountant is critical when valuing and dividing property in a complex divorce. A forensic accountant analyzes documents to help the court decide on child and spousal support payments, as well as how to divide community property. We work with a client's family law attorneys and utilize standard accounting practices in a legal case.

Tax returns, bank records, contracts, and other financial documents are assessed by a forensic accountant. In a divorce case, the accountant aims to reveal a spouse's financial information to ensure property valuation and division in the case are fairly split.

The forensic accountant digs deeper to look for hidden assets and inconsistencies between claims and financial records. The multi-faceted role of the accountant ultimately depends on the case's needs and its direction, and decided by the client and divorce attorney. We work with a client's family law attorneys and utilize standard accounting practices in a legal case.

Hidden Assets and Inconsistencies

The forensic accountant looks closely at documents to determine their accuracy and corroboration records with certain financial claims. The accountant also verifies all assets and income are prepared and on record.

It's not uncommon for a spouse to forget or deny certain assets, such as in the discovery of an extra-marital affair. Whether it's forgetfulness and ill-will, the accountant has resources to search for off-shore accounts and other hidden property.

Assist in the Discover Process

Discovery is the process of information gathering, and is when a forensic accountant is crucial to the divorce case. We will work with your attorney to make sure all the right documents and information are gathered through motions and subpoenas. Additionally, the forensic accountant may provide input that helps an attorney prepare the Interrogatories to your spouse. Interrogatories are written questions that reveal information and aid in preparation for deposition and trial.

Valuing Assets

A forensic accountant has the tools and knowledge to do the following:

  • Value businesses and professional practices for clients such as doctors, lawyers, accountants, and other professionals
  • Trace property to determine what is community and separate property
  • Separate business expenses versus personal expenses to ensure the business is valued accurately
  • Determine monthly cash flow

A forensic accountant hired for your case is also available to testify in a deposition or in court. If your case doesn't go to trial, than the accountant can provide input on tax implications that may result from dividing marital property.

Steps involved in the Divorce Process

The diagram below outlines the steps involved in the divorce process. The diagram identifies the legal process in divorce, explains what the legal terms really mean, and shows you exactly how we can help you through the process.

 

Legal Term: What it Really Means: Where Divorce Services fits:
Financial Affidavit Identify Marital Assets Martial Household Budget Review
Separate Household Budget Review
Lifestyle and Income Analyses
Prepare Financial Affidavit
Support in Temporary Maintenance Requests
Discovery Collect Information and Identify Under-Reported Assets/Income Discovery Requests
Business / Asset Valuation
Forensic Accounting
Tracing
Deposition and Interrogatory Support
Review Reports Prepared by Other Experts
Settlement Develop Settlement Proposals, Accept / Reject / Counter Analyze short and long-term impacts of settlement proposals
Recommend approaches to divide assets and determine support
Court Present Unsettled Issues to Judge Expert Witness Testimony
Rebuttal Testimony
Lifestyle and Income Analyses
Support in Direct and Cross-Examination of Expert Witnesses
Settlement Decree Formalize the Division of Marital Estate Review of Financial Aspects of Settlement

We provide business valuations, real estate appraisals, alimony and child support calculations, retirement plan QDROs preparation, forensic accounting, mediation settlement services, litigation support and expert witness testimony in family law related issues for divorcing parties and their attorneys.

Family Law Forensic Accounting Evaluations
(We use the Family Law Software for Forensic Accounting Analysis.)

  • Alimony (Spousal Support) calculations
  • Allocation of real property interests (community property, separate property, inherited property)
  • Apportionment of business interests
  • Asset misappropriation
  • Asset Tracing
  • Assist the attorney on defining the forensic accounting issues
  • Assist in settlement negotiations
  • Business goodwill
  • Business and Professional Practice Valuations
  • Cash Available Report
  • Cash flow analysis
  • Child support calculations
  • Collaborative divorce support
  • Corroborate financial information with non-financial information.
  • Commingling of separate and community property
  • Community/Separate Property Balance Sheets
  • Community property interest in a separate property business
  • Community property reimbursement
  • Community reimbursement for post-separation use of community assets
  • Credits and Reimbursements
  • Determine and quantify personal expenses
  • Dissipation of assets
  • Division of property
  • Employer benefits
  • Expert witness testimony
  • Fair market value
  • Fiduciary accounting
  • Hidden assets and hidden income
  • Imputed income
  • Income and Expense Declaration
  • Income available for support
  • Lifestyle analysis
  • Living expenses
  • Marital balance sheet
  • Marital lifestyle / standard of living analysis
  • Marital Standard of Living Report
  • Mediation support
  • Payment of community debt from separate property
  • Post-separation payments
  • Professional goodwill
  • Property transmutation
  • Quasi-community property
  • Retirement Plan Assets tracing and preparation of a Qualified Domestic Relations Order (QDRO) as David Hahn is a licensed and bonded Legal Document Assistant (LDA).
  • Schedule of assets and debts
  • Search for inconsistencies between financial information on certain documentation
  • Separate property asset tracing & analysis
  • Separate property reimbursement
  • Spousal maintenance & support
  • Support attorney in witness cross examination at trial
  • Testify as an expert witness in trial as necessary

    Family Law/ Divorce Resource Links:

    Divorce Manual : A Client Handbook - This publication produced by the American Academy of Matrimonial Lawyers covers the divorce process, reconciliation, counseling, selecting a divorce lawyer, estate planning considerations, and the lawyer-client relationship.


    Forensic Accounting/ Forensic Econmics Resource Links:


    Bureau of Economic Analysis
    Bureau of Labor Statistics
    California Civil Jury Instructions
    Consumer Expenditure Survey
    Consumer Price Index
    Current Employment Statistics
    Department of Commerce
    Economic Report of the President
    Employment Cost Index
    Journal of Forensic Economics
    Producer Price Index
    Social Security Administration
    U.S. Life Tables

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