An Accountant for the Business: To Whom Do I Owe the Duty in a Divorce?
By Alyson Sprafkin

            Accountants for a business in which significant community interest exists owe a duty to the business, and not to either party to the divorce action.  An accountant for a specific business presumably should always work to elicit the most advantageous tax and other financial results for that business.  Divorce does not change this duty.

            Although an accountant for a community business may have a close relationship with the managing spouse and may have no relationship at all with the non-managing spouse, the accountant should refrain from “siding” with the managing spouse.  The accountant should maintain a neutral image throughout the divorce process by furnishing any forensic accountant appointed to the case and/or either attorney (if either subpoenas the records of the business) with any requested business documents, to the extent they are not privileged or otherwise protected.

            An accountant who has a close personal and/or working relationship with the managing spouse may believe that directing his loyalty to that spouse will help that spouse in the divorce proceeding.  This assumption is wrong and can be fatal to the managing spouse’s position in the case.  If the non-managing spouse hires a remotely competent attorney, the attorney will question the accountant’s behavior, and if the behavior results in a significant decrease of the community interest in the business, then the court will penalize the managing spouse.

            Finally, a business accountant should be cautious when assisting a forensic accountant hired by one side.  Just because the business accountant is providing the forensic accountant with information does not mean the two are working together.  Remain neutral in your dealings with the forensic accountant.  Never share opinions (as opposed to data) with the forensic accountant upon which the forensic accountant might rely in valuing the business.  For example, you may want to provide the forensic accountant with the business’s balance sheets, profit and loss statements and tax returns for a specific time period.  You should not share your analysis of any of these documents with the forensic accountant.  Let the forensic accountant draw her own independent conclusions.