Ahh, divorce! This legally contentious area is so full fraud. Why might divorce
ID: 2466606 • Letter: A
Question
Ahh, divorce! This legally contentious area is so full fraud. Why might divorce proceedings be so open to fraud? What types of fraud are most common in divorce? How can these be counteracted? What does the accountant need to know, do?
Consider these resources:
http://www.divorcesource.com/research/edj/fraud/95jul73.shtml
http://www.dallastxdivorce.com/2011/05/articles/divorce-news/how-texas-divorce-fraud-is-like-powdered-milk/
http://www.divorcemag.com/articles/financial-fraud-and-divorce
Ahh, divorce! This legally contentious area is so full fraud. Why might divorce proceedings be so open to fraud? What types of fraud are most common in divorce? How can these be counteracted? What does the accountant need to know, do?
Consider these resources:
http://www.divorcesource.com/research/edj/fraud/95jul73.shtml
http://www.dallastxdivorce.com/2011/05/articles/divorce-news/how-texas-divorce-fraud-is-like-powdered-milk/
http://www.divorcemag.com/articles/financial-fraud-and-divorce
Explanation / Answer
Fraud: It is a material misrepresentation by ommision or commission which coerces a person to intentionally give up somethig of value.
Divorce proceeding are open to fraud based on the following factors as fraud implies both direct and indirect methods by which one party expoits the other party. In relation to divorce most frauds outcome comes from the inducement to marry, saperation to agreement and trial. In order to surpass the earlier judgement the material fraud must be manipulated. The victim must prove substatial harm in which the fraud must be induced to prove the matrialability to annule the marriage.
Fraud can also be perpetuated when one party fails to tell the other party the whole truth. Based on the above arguments the divorce proceedings must be open to fraud so as to ascertain the authenticity of the material evidence that has been produced so that the party contending does not have undue advantage attained from fraud or deceipt over the other party.
The types of fraud that are common in divorce are:
a) Extrinsic fraud is a type of fraud in which is formed at the court and can be identified easily.
b) Intrinsic fraud is a type of fraud in which less type of fraud is committed by the party and is not identified easily.The distinction can be critical when fraud is not identified right away.
c) Misrepresentation of asset values is a type of fraud in which does not contritute the extrinsic fraud. It includes the post judgement relief that is due to the wife can be altered if the values of the assets of the husband are misrepresented.
Apart from the above there are many types of frauds that can mislead the court in their judgement.
The objective of the party abetting to fraud is to prevent the other party from taking over the finances. The most common types of fraud in divorce have financial implications. The best way to couter them is to have Due dilligence in the contending parties so that there might not be scope for misrepresentation of the facts that lead to fraud.
The Accountant has an investigative approach in investigating the frauds during the divorce proceedings. He must be aware of the financial history of both the parties. And there must be an investigative approach on the credit history, Assets and the liabilities. There must be an comprehensive approach on observing the pattern of lifestyle of the contending parties.
Hence the role of the accountant is very crucial in planning and demonstrating an proving the financial conditions of both the parties if they are applying any fraudulant means to avoid the financial implications in the court.
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