The increase in the use of forensics technology in family law cases shows how it’s helping family lawyers cut costs and reach conclusions more efficiently.
By Rebekah Smith and Anthony Reitzel, Forensic Accountants
Advances in technology and the adoption of artificial intelligence (“AI”) are changing how financial and accounting records are managed and analyzed. This evolving landscape presents an opportunity for forensic accountants to extend services to family law clients with increased efficiency and accurateness.
Many family law cases involve critical financial issues that can include questions related to financial misconduct and misappropriation of assets, tracing of separate property (in states where applicable), and fraudulent financial statements. Historically, performing the analysis to develop conclusions about these issues involved the manual review of documents. This analysis can be laborintensive depending on the volume of documents and the format in which the data was produced.
Forensics Technology in Family Law and Data Analytics Software
Using computer software programs, forensic accountants can remove some of the manual aspect of data analysis, making the process more efficient and effective. One of these types of programs includes sophisticated data analytics software that can analyze large quantities of data more effectively and efficiently than Microsoft Excel – the software most accountants use. Data analytics software has the ability to import PDFs, plain text (.txt files), and spreadsheets, and pull the information into a database. Once the database is designed, the user can perform various analyses, such as Benford’s Law, Gap Detection, and Fuzzy Duplicate. Using data analytics software, a user can also search a database using criteria they set. For example, if a user wanted to search for any checks dated on a weekend, they can set a parameter to extract this information. With the ability to set search criteria, forensic accountants can automate the process of searching for evidence of fraud in accounting and banking records by setting parameters based on various indicators of fraud.
Data analytics software packages can automate burdensome tasks that were previously performed manually, but they are not as easy as just pushing a button. The user must still tell the program what characteristics to search for, and much of the analysis is driven by the individual’s professional judgment. The emergence of AI in the accounting industry can enhance the professional’s judgment by implementing concepts like machine learning to teach software the characteristics to look for in a data set. By adopting AI solutions, forensic accountants will have the capacity to move away from manual analysis and concentrate on larger issues while providing lower costs to their clients on data intensive projects.
Forensics Technology in Family Law: Identifying Risk Areas with Artificial Intelligence
Options for AI are currently limited, yet this is steadily changing as the technology continues to develop. The current AI technology can perform many of the functions data analytics software offers in an intuitive format that is both interactive and able to integrate into various accounting systems, including QuickBooks. For example, you can load data into an AI program and, with the appropriate instruction, the program can identify risk areas by finding transactions or accounts where the transactions do not appear normal when compared to the rest of the data. Once the program identifies the risk areas, the forensic accountant can then use this data to tailor their investigation and analysis. AI programs have the ability to streamline investigations when there is question about the underlying integrity of the data because one spouse believes the other spouse has done something to manipulate the records of the company.
Finally, there are services and programs (such as IDEA) that can assist with – or automate – the conversion of bank and credit-card statements into an electronic (generally Excel) format. For clients with copious amounts of statements, it may be useful to use a service or software to convert the statements to a format that can be filtered and searched with ease.
As forensic accountants are able to implement some of these relatively new technologies, they should be in a position to reach conclusions faster and more efficiently, resulting in cost-savings benefits for the attorneys and clients who engage them.
Rebekah Smith, CFF, CPA, CVA, MAFF is a Partner and Director at GBQ Consulting LLC, an accounting and consulting firm with offices in Columbus and Cincinnati, Ohio. Anthony Reitzel began his career with GBQ Partners in 2016 as a staff accountant before joining GBQ Consulting in the Forensic Dispute and Advisory Services practice. www.gbq.com
Computer forensics and eDiscovery can play an important role in the outcome of your client’s divorce or family law case, revealing key details that might otherwise remain buried.