Forensic Accounting in Divorce: Finding the Truth Behind the Finances - A Q&A with Matthew Pontiff, CPA/ABV/CFF, CVA

When it comes to navigating complex financial matters, Matthew is known for his expertise, precision, and client-centered approach. He provides comprehensive valuation, litigation, tax, and traditional accounting services, with a primary focus on valuation and litigation while maintaining strong, long-term tax relationships. A true problem-solver, Matthew helps clients—from individuals and corporations to nonprofits and partnerships—make informed decisions through thoughtful tax planning and compliance strategies.

As a former business owner, Matthew understands firsthand the challenges companies face and brings that insight to his management and consulting engagements. His work spans business valuations, litigation support, tax strategy, and business consulting, and he has guided clients through the purchase and sale of businesses of all sizes. He’s also served as an expert witness in numerous civil cases, providing clarity in matters involving economic damages, forensic accounting, and divorce-related tax issues.

Matthew earned his Bachelor of Business Administration in Accounting from Niagara University and is a member of the AICPA, the Colorado Society of Certified Accountants, and the National Association of Valuation Analysts.

To get to know Matthew better and learn more about his approach to client service, we asked him a few questions:

Q1. For those who aren’t familiar, what is forensic accounting, and how does it differ from traditional accounting work?

Forensic accounting is a specialized field focused on investigating financial discrepancies, while traditional accounting centers on maintaining accurate financial records and reports. Forensic accounting involves the use of accounting, auditing, and investigative skills to examine financial records for legal purposes. Forensic accounting is frequently used in fraud detection and prevention, litigation support (divorce, bankruptcy, business disputes), criminal investigations, insurance claims, and economic damages analysis.

Q2. In your experience, what types of divorce cases most often require the skills of a forensic accountant?

Divorce cases involving a business frequently have a need for a forensic accountant who is also a business valuation specialist. Businesses need to be valued for divorce purposes, and frequently, there are personal non-operating expenses deducted in the business that are income to the proprietor and affect the business value. Additionally, divorce cases where income determination is necessary to calculate child support or alimony frequently require a need for forensic accounting. In some cases, a “lifestyle analysis” to determine hidden sources of income and even fraudulent transactions can be an opportunity to hire a forensic accountant.

Q3. What are some of the most common signs that hidden assets or financial irregularities may be present in a divorce?

Common signs of hidden assets or financial irregularities can include spending exceeding income, significant personal assets (homes, vehicles, jewelry), and excessive business expenses and a pattern of reported business losses. Usually, people live within their means. When they don’t, there may be excessive borrowing, or even hidden assets or sources of funds to support their lifestyle.

Q4. Can you walk us through your typical process when reviewing financial records in a divorce matter?

We always request certain documents for at least the last five years, including tax returns, bank statements, loan applications, business financial statements, personal net worth statements, and credit cards, to name a few. Tax returns generally serve as a basis for identifying income, assets, and debts. We always start with a comprehensive tax return analysis. This will then determine the need to dig further into bank statements, credit card statements, and other source documents. Interviews with the parties can also serve many purposes and assist us in understanding the parties' financial picture, as well as identifying areas of concern where the interviewee may not be fully forthcoming.

Q5. How do you go about identifying hidden bank accounts, unreported income, or unusual spending patterns?

IRS Transcripts, interviews, and review of known financial accounts for unidentified accounts or transactions include some steps that may identify a hidden asset.

Q6. Once your investigation is complete, how are your findings typically used in mediation or in the courtroom?

We usually deliver a report to our client, who can be either the engaging attorney or the client themselves. The report can be a full-blown report or an abbreviated one for purposes of mediation and settlement.

Q7. What advantages do divorcing individuals gain by bringing in a forensic accountant early in the process?

It's important to engage a forensic accountant early if there are business concerns or concerns of hidden assets or income. The work is comprehensive and takes time, so ensuring the advisor has sufficient time to perform the work is critical.

Q8. How does your approach differ when assisting with mediated divorces versus those in litigation?

A mediated divorce can usually be a less comprehensive and more streamlined approach, where litigation involves certain formalities and processes that can be streamlined in a mediated situation.

Q9. When selecting a forensic accountant, what qualities or credentials should divorcing clients prioritize?

There are many certifications available. A CPA, for example, may or may not be a good choice depending on their experience and background in forensic accounting. Like medical doctors, accountants come in many specialties. One with a certification in forensic work, such as a CFF (Certified in Financial Forensics), or a CFE (Certified Fraud Examiner), may be a good choice, but experience is also key.

Q10. What is one common misconception about forensic accounting in divorce that you would like to clear up?

Forensic accounting is a very dynamic profession that involves as much art as science. While there clearly is a lot of technical work in reviewing records and standard accounting functions, a lot of the work is more intuitive. It's like solving a puzzle.

Want to get in touch and learn more about how Matthew can help you? Email him below!

Matthew Pontiff, Tax Partner, Aprio

matthew.pontiff@aprio.com