Searching for a forensic accountant for your California divorce is similar to searching for a divorce lawyer. Many times, you are not sure where to start and what to look for, right? You ask around, perhaps of family, friends or colleagues. You go to your own CPA, the one that does your taxes, and ask if he or she knows anybody. You searched the internet looking for a forensic accountant.
You hope a qualified one will pop-up on the first page.
You start to wonder if it's more guess-work than anything else.
Not all forensic accountants in California are created equal
Consider yourself lucky because we are going to take a lot of the mystery out of this process. As divorce lawyers, we know who the better forensic accountants in California (specifically Southern California). We have worked with forensic accountants, gone up against them when the other spouse hired them and used them as court appointed experts. Some forensic accounts have reputations that precede them and not always in a good way. A few are great. Some are not.
This is our perspective on finding a forensic accountant, not everybody else's
Before we get to finding one, let's be clear about a couple of things. First, we are offering you our perspective and our perspective is that of divorce lawyers. If you spoke with different attorneys, you may get different perspectives. In addition, if you spoke to other accountants or other professionals, they may disagree on what you should look for when looking for a forensic accountant.
Second, our perspective is limited to forensic accounting in family law. Forensic accountants, like lawyers, may offer services in other areas of law. It is not as common to find one that exclusively works on family law cases. Some forensic accountants actually prepare tax returns and help with audits. You get all types.
Take that smart phone and do the smart thing - dial us if you have questions
If you have a divorce or paternity case that you have questions about your need for a forensic accountant, please don't hesitate to contact us. That is why we offer an affordable initial strategy session. Not only will we help you find a good forensic accountant for your family law case but we will take over your representation if, after talking, we believe we are a good fit for you and you for us. We are divorce and family law attorneys and that is all we do.
What are the main uses of the forensic accountant in a divorce cases?
In divorce cases, they include:
- Analysis of income, sometimes called controllable cash flow, for child support and spousal support purposes.
- Valuation of a business
- Tracing of community or separate property money from one source to others
- Calculation of reimbursement claims
These are the most common although there are others.
The difference between a privately retained forensic accountant and a court appointed one
Privately retained forensic accountants are your experts. You and your divorce lawyer hire the accountant, pay for it (unless you can get a court order for your spouse to pay) and you can communicate what you want your expert to do.
Some of the advantages of having your own forensic accountant
- Keeping the forensic accountant's identity a secret until you are sure that you want to use him or her.
- Having direct communication without the need for your spouse's lawyer to be present in every discussion.
- Being able to dictate what aspects of the case you want the forensic accountant to focus on.
- Adding tasks or taking them away as the case evolves.
Forensic accountants are not supposed to be hired guns. But it helps to have someone who is looking at the case from your perspective and is retained as your expert, assuming you have the facts and numbers the forensic CPA can use.
Court appointed forensic accountants
Court appointed forensic accountants are not privately retained by a spouse. They are the court's expert (not your or your spouse's expert) and have a duty to provide objective results to the court. Their court order limits their duties. They cannot simply do whatever they want and one spouse cannot direct their work. Once the forensic accountant completes the report, he or she gives it to the Court and each spouse's lawyer.
The advantages of having a court appointed forensic accountant include:
- The cost is usually split or, for the lower earning spouse, the higher earner pays for it…not so much of an advantage to the higher earner obviously.
- One forensic accountant provides conclusions and numbers versus two battling it out. Less attorney's fees for each spouse.
- Since they are not an expert for either spouse, the report may be more balanced.
Yes, there are more advantages and disadvantages to each one.
Yes, there are some cases better fit for a privately retained forensic accountant and others for a court appointed one.
Yes, it really does depend on the facts of each case…which means, you shouldn't make this decision without good legal advice and analysis.
Experience and knowledge of a good forensic accountant in Southern California
Forensic accountants, especially on complex, higher asset divorce cases, must have experience doing the analysis for which you intend to hire them as well as experience testifying in depositions and court. The experience you are looking for is not limited to the accountant's years in practice. That is one factor. Take a forensic accountant who has testified a few times in court and has handled a handful of business valuations and you should be careful giving that person a complex case. It doesn't matter how many "years" that person has been a forensic accountant.
Different levels of licensing and certifications of forensic accountants. All of those initials.
Forensic accountants come with different licensing. The most common ones are:
- Certified Public Accountant (CPA)
- Forensic Certified Public Accountant (FCPA)
- Certified Fraud Examiner (CFE)
- Certified Valuation Analyst (CVA)
- Certified Divorce Financial Analyst (CDFA)
We also see an Accredited Senior Appraisal for business valuations (ASA) for time to time.
Hourly rates and billing practices of forensic accountants in California
The best forensic accountants are not the most expensive but you still get what you pay for in this field, like most others. Forensic accountant rates in Orange County and the Southern California counties range from $250.00 per hour to over $400.00. Forensic accountants that are part of a small practice or sole practitioners generally charge less. Part of that reason is they have a lower overhead. If you choose a forensic accountant that is part of a large firm with offices throughout California, you may be paying much more and not necessarily for better work.
The bigger firms also tier their hourly rates depending on who is doing the work. A senior forensic accountant may charge hundreds of dollars per hour more than a junior one. In some forensic accounting firms the majority of the work is done by the juniors and overseen by the seniors.
The one-on-one experience versus that of the forensic accounting firm
We touched on this a bit already but let's go into more detail.
Personal attention matters. When you choose your family law firm or lawyer, you want to speak with a lawyer, not a paralegal or secretary about your case. When you call, you want a return call if your retained professional is not able to take the call then. When you have questions, you want answers. You don't want to be billed to death. You want to know what work is being done, why it is being done and when it will be completed.
That makes you normal.
This is also where our experience comes in handy. We will evaluate your case, figure out what your needs are, bring one or more forensic accountants for you to interview and then an informed and intelligent decision can be made. In other words, you pick!
Which California forensic accountant is right for you?
Forensic accountants are not lawyers. They cannot give you legal advice and you probably should not run out there and hire one for your divorce case without having an experienced family law firm like ours on your side.
We can help you with the decision.
We hope this article shed light on some of the things you should consider when you choose the right forensic accountant for your divorce or family law case. Contact us about your case today and let's get you started and heading on the right track.