Many people believe that forensic accountancy is all about fraud but, in fact, one of its most frequent applications is in divorce proceedings, where ‘following the money’ is essential in obtaining a proper settlement for both parties.
One of the most important documents in a divorce is a Form E, which is a legal document supposed to disclose the true value of assets and liabilities of both parties.
Unfortunately, however, given the heightened emotions and feelings of bitterness on one side or another often associated with divorce, it is quite common for either partner to try and hide assets, undervalue them or overstate the position of liabilities.
And while a divorce lawyer may have a strong reputation for tenacious negotiations or amicable custody agreements, a forensic accountant possesses a unique skill set related to financial asset management and can easily uncover a paper trail of deception.
Not only can a seasoned forensic accountant find hidden assets, but they can advise on taxation issues, such as Capital Gains and Inheritance Tax and also on specific areas such as pension considerations.
In fact, so expert have forensic accountants become at finding the money in the UK that London has recently been dubbed the “divorce tourism” capital of the world, with 24,000 of the 150,000 divorces handled in England and Wales now involving foreign nationals.
And while divorce is never a subject for good cheer, if it must happen, better it happens here, with Desmond Hudson, Chief Executive of the Law Society applauding this as positive news for the country’s professional services industry: “We have always said that, at one level, this rise in international work is good for UK plc”.
As an accountant; Roger Isaacs specialises within business turnaround and business valuation.