Page 29 - Family Law Services

Chapter 4

Engagement Process

The CPA may perform a broad spectrum of services in divorce engagements. Among other functions,
the CPA may

• value a business, other assets, or both;

• trace assets between the premarital to postmarital periods;

• assist in distribution scenarios of the assets and liabilities;

• calculate the potential or anticipated tax effects of contemplated transactions, such as a proposed
settlement, asset distribution, or support scenario;

• perform forensic procedures to determine income;

• determine the lifestyle or the financial standard of living during the marriage;

• locate hidden assets; and

• assist the court as an expert to describe financial activities, including a marital dissolution within
a bankruptcy proceeding.

In general, the service(s) the CPAs may perform fall into the following four broad categories:

• Identification of assets, liabilities, and family income

• Determination of the nature or character of assets and liabilities

• Valuation or quantification, or both, of assets, liabilities, and income

• Division or distribution, or both, of assets, liabilities, and income

It is important to understand that the CPA may be called upon to perform one, some, or all of these func-
tions. The specific roles a CPA will perform in an engagement will depend upon the order of the court or
the agreement the CPA reaches with the attorney or client. CPAs are seldom, if ever, engaged to perform
all the duties they are capable of performing in a family law engagement. At the same time, CPAs some-
times draft engagement letters that are general and nonspecific about the duties they will perform in an
engagement. (See chapter 3, "Planning the Engagement.") The scope of an expert’s services can expand
during the course of an engagement. If so, the CPA should consider amending the terms of the engage-
ment letter with the client.

Identification of Assets, Liabilities, and Family Income

If the CPA is retained in a divorce proceeding, identifying the assets and liabilities of the parties may be
one of the initial financial steps. This evaluation includes preparing an inventory of all the assets and li-
abilities that could be considered, then eliminating any assets that should be excluded because they are

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