When a divorcing couple owns a family business, it complicates the parties’ financial settlement. Generally, the business will be awarded to one of the spouses and how it is valued and divided depends on the type of business that is involved. When One Spouse is a Licensed Professional and Owner of the Business When one…
Documents Needed for Incorporated Businesses There are specific documents concerning corporations that Forensic Accountants frequently request to review in a dissolution matter. Typical ones include articles of incorporation, by-laws, corporate minutes, stock certificate books, stock ownership lists, organograms and job descriptions of key officers. Articles of incorporation: Forensic Accountants want to know when the company…
In the previous issue of Forensic Accounting Today, I consisely clarified the key reasons why Forensic Accountants request certain documents for business valuations. These included financial statements, tax returns, general ledgers and journals, paid bills, bank statements, canceled checks and brokerage statements, income tax audits, and stockholder and director minutes. (If you do not have…
The valuation and distribution of marital property is typically one of the most difficult and arguable issues to be dealt with in a divorce proceeding. The process can become considerably more complicated and expensive when the marital community owns an interest in a business. In such cases, a Forensic Accountant is often hired by the…
In some cases, it can be difficult to determine which expenses should be considered as personal or business. There are business owners who are particularly sophisticated in their understanding of financial accounting methods and who may intentionally conceal personal expenses while claiming them as ordinary and necessary business expenses. For example, in a recent case…
In litigating many dissolution cases, a material issue is often the determination of the real income of one or both of the parties to the case. The reason? The existence of perquisites and/or fringe benefits. It is common that a significant portion of the income generated from employment or by a self-employed business owner comes…